Arbitration Agreement
(Mutual Agreement to Arbitrate Employment-Related Disputes) (KY)

Summary

This template is an arbitration agreement used when arbitrating employment-related disputes in Kentucky. This template includes practical guidance, drafting notes, and alternate and optional clauses. This mutual agreement to arbitrate employment related disputes is intended for private employers, and features guidance to withstand challenges to arbitrability. The agreement contemplates using the American Arbitration Association as the arbitral organization, but parties can choose to use other organizations as well. Its language has been customized to comply with Kentucky and federal law. As a result, the text of this template differs from the non-jurisdictional Arbitration Agreement (Mutual Agreement to Arbitrate Employment-Related Disputes). Kentucky policy generally favors arbitration. See Schnuerle v. Insight Cmmc'ns, Co. L.P., 376 S.W.3d 561, 574 (Ky. 2012). Such policy is reflected in Kentucky's Uniform Arbitration Act (KUAA), Ky. Rev. Stat. § 417.045 et seq., which provides that a written agreement to submit any existing controversy to arbitration or a provision in written contract to submit to arbitration any controversy thereafter arising between the parties is valid, enforceable, and irrevocable, save upon such grounds as exist at law for the revocation of any contract. Ky. Rev. Stat. § 417.050; Paul Miller Ford, Inc. v. Rutherford, 2007 Ky. App. LEXIS 494, at *7 (2007) (observing that Kentucky's arbitration statute expresses a policy favoring and encouraging arbitration); Schnuerle, 376 S.W.3d at 575. However, an arbitration agreement may be voided upon grounds that exist at law or in equity for the revocation of any contract, including unconscionability. Mortg. Elec. Registration Sys. v. Abner, 260 S.W.3d 351, 354 (Ky. Ct. App. 2008). Kentucky courts view an unconscionable contract as one which no person in their senses and not under delusion would make on the one hand, and that no fair and honest person would accept on the other. Hathaway v. Eckerle, 336 S.W.3d 83, 88 (Ky. 2011); Green v. Frazier, 2021 Ky. App. LEXIS 80, at *14–15 (2021). For an annotated non-jurisdictional arbitration clause for insertion in a larger employment agreement or handbook, see Arbitration Clause for Employment-Related Claims. For more information on arbitration agreements, see Arbitration (KY). See also Arbitration Clause Drafting and Arbitration Agreement and Class Action Waiver Enforcement in Employment Litigation.