SHANKLE VS B-G APPELLATE COURT DECISION 1
To: Frank Hatstat, Business 201 Instructor
FROM: Yi Chun Tsang, Student
DATE: October 12, 2015
SUBJECT: Shankle vs B-G Maintanence Management Appellate Court Decision
When Matthew Shankle was hired by B-G Maintenance Management as a janitor, he
signed an employment agreement that included a binding arbitration clause. The
agreement stated that any disputes between Shankle and B-G were to be resolved through
arbitration and compelled Shankle to pay half of the arbitration fee. When Shankle was
fired, he sued B-G for employment discrimination. B-G commanded arbitration and the
arbitrator required a deposit of $6,000. The district court ruled in Shankle’s favor. B-G
appealed. The purpose of this memo is to inform and explain the appellate court’s decision
in this case.
The appellate court agreed with Shankle and ruled that the arbitration agreement was
invalid.
According to the Tenth Circuit, an arbitration agreement was unenforceable when it is a
condition of employment or continued employment and requires the employee to pay an
unaffordable amount for the cost of arbitration.
In Matthew Shankle’s case, he signed the agreement as a condition of continued
employment. The arbitration clause stated that any disputes between Shankle and B-G
were to be resolved through arbitration and Shankle would be responsible for one-half of
the arbitrator’s fees, and the company the other half.
Because Shankle could not afford to pay the fee, and other employees in similar conditions
to Shankle would also be unlikely to be able to pay such a fee, the arbitration agreement
