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Unilateral-Modification Provisions In Employment Arbitration Agreements, Michael L. Demichele, Richard A. Bales

Hofstra Labor & Employment Law Journal

Unilateral-modification clauses give one party the unfettered right to amend or reject the underlying contract, often with neither notice to nor consent from the other party. State and federal courts are divided on the issue of whether employment arbitration agreements subject to such clauses are enforceable (and the courts holding the arbitration agreements are unenforceable are divided on which of several contract law doctrines apply). The majority of courts refuse to compel arbitration when the employer's unilateral-modification rights create a lack of consideration, a non-mutual agreement, an illusory promise to arbitrate, or an unconscionable agreement. A minority of courts find …