Somewhere in Austin, Texas, a general manager is having the kind of day that makes you reconsider career choices. He’s the man who looked at a stack of arbitration agreements, saw a signature in the “employer” box, assumed someone else had signed it, and moved on.
That someone else was the employee herself, who had helpfully signed both her box and the employer’s box on the document meant to keep her workplace disputes out of court.
Now, thanks to a Fifth Circuit Court of Appeals ruling issued last month, that unsigned arbitration agreement is worth precisely nothing. And the company that runs the nightclub gets to defend a Fair Labor Standards Act lawsuit in court instead of the arbitration forum it spent time and money creating.
The case reads like a cautionary tale written by someone with a dark sense of humour about corporate processes.
What happened
Here’s what happened: In 2020, the company distributed arbitration agreements to its waitstaff. The document was clear enough. It said that by signing, “Employee and the Club’s Representative” agreed to be bound by its terms. Two signature boxes sat at the bottom — one for the club, one for the employee.
The employees initialed every page, dated everything properly, and then — in what appears to be an act of administrative goodwill or confusion — one of them signed both boxes. She later said she didn’t recall why she did this, but made clear she “did not intend to be bound by the Arbitration Agreement until and unless” the employer also signed.
The general manager tasked with countersigning these agreements never added his name. He figured someone else had handled it.
Four years later, when the employees sued for wage violations, the company moved to compel arbitration. The courts said no. The agreement required both parties to sign. Only one did. Contract formation requires execution with mutual intent. This had only half of that equation.
Clear intent?
The company appealed, arguing that its conduct — drafting the agreement, distributing it, receiving it back, attempting to enforce it — showed clear intent to be bound. Surely that mattered?
The Fifth Circuit wasn’t moved. “We begin this analysis with the contract’s express language,” the court wrote. “Unless that language is ambiguous, we end it there too.”
The language wasn’t ambiguous. It said both parties needed to sign. One party didn’t. Case closed.
What makes this ruling particularly fascinating isn’t the legal reasoning — that’s straightforward enough. It’s what it reveals about the gap between policy and execution in workplace administration.
This wasn’t some fly-by-night operation. The company had employment lawyers. It drafted a detailed arbitration agreement with all the right clauses. It created a process for distribution and return. Someone clearly thought hard about protecting the company from litigation risk.
And then they forgot to sign the paper.
Good intentions don’t always equal good results
This isn’t about one careless manager. It’s about the organizational assumption that good intentions equal good results. The company assumed that because it meant to arbitrate disputes, it could arbitrate disputes. The court reminded them that law doesn’t work on vibes.
The ruling also highlights a truth about workplace agreements: employees read these documents differently than employers imagine. The employee signed both boxes, possibly trying to be helpful, possibly confused about what was expected. When the lawsuit came, she stated clearly that she never intended to be bound until the employer signed too.
That interpretation held up because the contract’s language supported it. The document said “Employee and the Club’s Representative” would represent certain things by signing. Not “Employee or the Club’s Representative.” Both.
The company tried every argument in the playbook. It pointed to cases from other jurisdictions where similar language hadn’t created a signature requirement. The court noted those cases didn’t apply Texas law or weren’t analogous. It argued that specific conditional language — words like “must” or “shall” or “only if” — should be required to make signatures a condition precedent. The court cited Texas cases showing otherwise.
It suggested the whole thing came down to offer and acceptance, not contract execution. The court said that misunderstood the legal issue at hand.
Every argument failed because the contract said what it said, and the employer hadn’t signed it.
The takeaway
The practical lesson here isn’t complicated: if your carefully drafted agreement requires signatures from both parties, make sure both parties actually sign. Check the signature lines. Create a process that flags unsigned documents. Don’t assume goodwill or conduct can substitute for the formality you yourself required.
But there’s a larger point here, too. Organizations spend enormous amounts of time crafting policies, agreements, and procedures designed to protect against risk. They hire lawyers, hold meetings, revise language, distribute documents.
Then they trust that implementation will somehow take care of itself.
It rarely does. The distance between a perfect policy and actual practice is where most workplace problems live. Not in the drafting, but in the follow-through. Not in the intent, but in the execution — literal execution, in this case, by way of a missing signature that cost a company its arbitration clause and likely a considerable sum in legal fees.
The general manager saw a filled-out signature box and assumed the work was done. That assumption just cost his employer the ability to avoid court. Somewhere, an employment lawyer is updating the training manual with a new section: “How to Verify a Signature Is Actually There.”
It seems almost too obvious to require explaining. But then again, so did signing the arbitration agreement.
See the original ruling here: https://www.ca5.uscourts.gov/opinions/pub/24/24-50954-CV0.pdf
