Johnson v. Aleut Corp.

[EMPLOYMENT LAW]

In Johnson v. Aleut Corp.,[1] the supreme court held that a broadly worded arbitration agreement can give an arbitrator authority to determine the arbitrability of disputes as well as resolve such disputes based on theories that differ from those submitted by the parties.[2] The employment contract between the Aleut Corporation (the “Corporation”) and Johnson stated that Johnson would serve as CEO of the Corporation with an automatic extension subject to both his fulfilling a reminder provision and the Corporation providing him with notice if it chose not to renew his employment.[3] Even though the Corporation never received Johnson’s reminder, the two parties nonetheless proceeded to engage in renewal discussions.[4] After Johnson was subsequently terminated without requisite notice, he challenged his termination in arbitration as required by his employment agreement. [5] The arbitrator ultimately determined that because the Corporation was aware of the reminder provision and because it did not terminate Johnson for cause, it breached the contract.[6] The lower court subsequently vacated the decision, holding that the arbitrator acted beyond the scope of his authority in determining that, contrary to both parties’ concessions, the reminder was not a condition precedent to the renewal of Johnson’s contract.[7] The supreme court reversed the lower court’s decision, reasoning that great deference is given to arbitration decisions.[8] Thus, according to the court, the arbitrator’s conclusion that the Corporation violated the agreement was reasonable and within the scope of the arbitrator’s authority.[9] Reversing the lower court’s decision, the supreme court held that a broadly worded arbitration agreement can give an arbitrator authority to determine the arbitrability of disputes as well as resolve such disputes based on theories that differ from those submitted by the parties.[10]

 



[1] 307 P.3d 942 (Alaska 2013).

[2] Id. at 952.

[3] Id.

[4] Id. at 945.

[5] Id. at 947.

[6] Id.

[7] Id.

[8] Id. at 948.

[9] Id.

[10] Id. at 952.

Johnson v. Aleut Corp.

[EMPLOYMENT LAW]

In Johnson v. Aleut Corp.,[1] the supreme court held that a broadly worded arbitration agreement can give an arbitrator authority to determine the arbitrability of disputes as well as resolve such disputes based on theories that differ from those submitted by the parties.[2] The employment contract between the Aleut Corporation (the “Corporation”) and Johnson stated that Johnson would serve as CEO of the Corporation with an automatic extension subject to both his fulfilling a reminder provision and the Corporation providing him with notice if it chose not to renew his employment.[3] Even though the Corporation never received Johnson’s reminder, the two parties nonetheless proceeded to engage in renewal discussions.[4] After Johnson was subsequently terminated without requisite notice, he challenged his termination in arbitration as required by his employment agreement. [5] The arbitrator ultimately determined that because the Corporation was aware of the reminder provision and because it did not terminate Johnson for cause, it breached the contract.[6] The lower court subsequently vacated the decision, holding that the arbitrator acted beyond the scope of his authority in determining that, contrary to both parties’ concessions, the reminder was not a condition precedent to the renewal of Johnson’s contract.[7] The supreme court reversed the lower court’s decision, reasoning that great deference is given to arbitration decisions.[8] Thus, according to the court, the arbitrator’s conclusion that the Corporation violated the agreement was reasonable and within the scope of the arbitrator’s authority.[9] Reversing the lower court’s decision, the supreme court held that a broadly worded arbitration agreement can give an arbitrator authority to determine the arbitrability of disputes as well as resolve such disputes based on theories that differ from those submitted by the parties.[10]

 



[1] 307 P.3d 942 (Alaska 2013).

[2] Id. at 952.

[3] Id.

[4] Id. at 945.

[5] Id. at 947.

[6] Id.

[7] Id.

[8] Id. at 948.

[9] Id.

[10] Id. at 952.