For the first time, a federal circuit court has examined whether an agreement’s arbitration clause still applies after the agreement expires where the agreement’s survival clause does not specifically list the arbitration provision. The court found that the arbitration clause survived because the parties did not clearly imply that it was to expire with the agreement. Huffman v. Hilltop Cos., LLC.

Strong Presumption Favoring Arbitration
The plaintiffs worked for The Hilltop Companies reviewing mortgage loan files to determine whether foreclosure and other proceedings were lawful. Each employee had signed a company-drafted employment agreement containing 24 paragraphs, including an arbitration clause and a survival clause. The survival clause listed exactly half of the agreement’s paragraphs, but not the arbitration paragraph. After their Hilltop employment ended, the employees filed a class-action lawsuit in the U.S. District Court for the Southern District of Ohio, alleging violations of federal and state fair-wage laws.

Hilltop filed a motion to dismiss and to compel arbitration, arguing that the agreement provided for arbitration of all disputes, even those arising after the agreement’s expiration. The district court denied Hilltop’s motion, relying on principles of contract interpretation to find meaning in the absence of the arbitration clause from the survival clause and to construe ambiguous terms against the drafter’s interests. The district court did not reach a second issue concerning whether the agreement permitted class-wide arbitration.

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