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Nursing Home Arbitration Agreements are Binding

Published on: May 17 2017

Nursing homes have been joining the list of companies that require customers to sign agreements waiving their rights to go to court. Any disagreements must be taken to arbitration. A Kentucky court had found that the agreements weren’t binding when an agent for a nursing home resident signed the agreement on the resident’s behalf, unless the power of attorney explicitly granted the agent the right to waive the right to go to court.

The U.S. Supreme Court overturned that decision. The court found that the law doesn’t require the power of attorney document to be that detailed. Other decisions have upheld in general the right of a business to require customers to waive the right to go to court as part of their transaction.

In the case at hand, the Kentucky Supreme Court had effectively hamstrung arbitration agreements by saying an agent could not deprive his principal of an adjudication by judge or jury unless the power of attorney provided for this expressly.

The majority determined Monday, however, that this so-called clear-statement rule “fails to put arbitration agreements on an equal plane with other contracts.”

Using stronger language later, Kagan said the court had “flouted the FAA’s command to place those agreements on an equal footing with all other contracts.” Her 10-page opinion draws parallels between the Kentucky rule and the one struck down in the 2011 decision AT&T Mobility LLC v. Concepcion.

 

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