December 17, 2025
Manager’s “Unintentional Mistake” Makes Employment Agreement Unenforceable
The 5th U.S. Circuit Court of Appeals reminds employers that if your employment agreement reads that it must be signed by both parties to take effect, then that is what is needed to make it enforceable. In this case, the employee signed an arbitration agreement. The employer testified that “because of an unintentional mistake” on the General Manager’s part, the agreement was unsigned by a company representative. When the employer tried to enforce the agreement, the court ruled they could not do so since they failed to sign it.
I have seen this more than once and I suspect you have too. And it is often when you least expect it. An employee is leaving your employment, and you want to enforce a no-solicitation agreement you made a condition of employment at the time of hire. Or a competitor has confirmed that your employee is working part-time for them. Now you want to enforce a no-solicitation agreement you made a condition of employment at the time of hire. The bad news is, when you look in the employee’s HR files, you cannot find the signed agreement. Or you find it has one but not both signatures. OOPS! Now what?
In this case, part of the agreement read, “By signing this arbitration agreement, Employee and the Club’s Representative represent that…” and goes on to explain the terms to which they agree.
The court explained, “whether a signature is required to bind the parties is a question of the parties’ intent…Signatures are not required as long as the parties give their consent to the terms of the contract, and there is no evidence of an intent to require both signatures as a condition precedent to it becoming effective…However, when the terms of the contract make it clear that a signature is required, a party’s failure to sign the agreement will render the agreement unenforceable.”
Based on the language of the agreement, the court concluded that the employer’s signature was necessary to make the agreement enforceable.
Lessons learned? Review your agreements, whether they are a non-compete, no solicitation, severance, offer letters, or something else. If you want to require one or both signatures to make it enforceable, you clear language to express that. If not, then be sure your agreement does not have any language to the contrary, including by inference. If your agreements have not been reviewed in a while, have your company’s employment counsel do so.
