A recent appellate court case and ruling addressed some issues commonly raised about arbitration agreements in nursing home contracts, so it’s worth looking at what the Illinois court had to say. The personal injury case involved an elderly woman who said that she suffered injuries at a nursing home where she was undergoing rehabilitation.
The woman wanted her case to go to court, but her residency contract contained an arbitration agreement. She claimed that the agreement was “insufficient in both form and substance” in stating how it would be determined whether a case was arbitrated or litigated. A trial court had ruled in her favor, stating that the facility couldn’t compel the case to be arbitrated.
Should the agreement be separate?
The majority of the appellate court disagreed, referring to the American Arbitration Association’s rules. Two of the three justices wrote, “Federal courts have long held that incorporation of specific arbitration rules, like AAA’s rules, into an arbitration agreement is sufficient to find ‘clear and unmistakable’ evidence that the parties intended to delegate the question of arbitrability to an arbitrator.”
The lone dissenting justice noted that “courts have consistently cautioned that an agreement to arbitrate is a matter of contract, and that arbitration is a matter of consent, not coercion.” She also noted that the arbitration language should have been in a separate document or at least an addendum and not within the residency agreement.
Nursing homes are no longer allowed to require a person to sign an arbitration agreement as a condition of residency. However, that wasn’t the case when the woman signed her residency agreement.
Last fall, the U.S. Supreme Court declined to hear a case disputing federal regulations prohibiting nursing homes from requiring agreement to arbitration as a condition of residency. That was already a federal requirement, but it hadn’t been vigorously enforced. That changed when new guidance last fall required nursing home surveyors to check for compliance in the nursing home contracts.
Having experienced legal guidance as you draft your arbitration clauses can help ensure that they’re in compliance with the law and can hold up to challenges.