Washington Court of Appeals won't enforce a one-sided arbitration agreement

Although Washington law favors arbitration, the Washington Court of Appeals made clear this week that it will not enforce an arbitration agreement that lacks neutrality.  In Rodriguez v. Windemere Real Estate/Wall Street, Inc.  a real estate agent sued his brokerage, a franchisee of Windemere Real Estate Services (WRES), for unpaid commissions.  The brokerage moved to compel arbitration pursuant to a brokerage/sales associate agreement between the parties that required all disputes to be resolved through arbitration. The agreement entitled WRES to select the three-person arbitration panel from its “family” of owners, brokers, managers and sales associates, all of whom had contractual and financial ties to the company. On these facts, the court found the process lacked neutrality and was, therefore, unenforceable.