Arbitration agreements appear in several industries, automobile dealerships, online subscriptions and, of course, in many jobs. The employer will often ask a new employee to sign an arbitration agreement in their first few days of a new job. But, are all those arbitration agreements binding? In Mertens v. Benelux, the Fifth Circuit applied Texas law to find that the failure of the employer to sign one such arbitration agreement rendered the agreement invalid.

The arbitration agreement used by Benelux contained this language:

“By signing this arbitration agreement, Employer . . . represents that they each agree to be bound by the agreement”

That language, said the court meant both parties must sign the agreement. If one party does not sign, then the agreement is not binding on both parties. The General Manager of the club did not sign it through oversight. He admitted that he assumed some other representative of the club had signed it.

But, Benelux argued that a party must “clearly and explicitly” express an intent to make signatures a condition precedent to forming a contract. The employer argued that the agreement lacked language stating that a signature “shall” or “must” occur before the agreement becomes a binding contract. The court did not agree. The court noted that Texas caselaw did not require only certain words to make signatures a condition precedent. Words such as “shall” or “must” were not always required to create a condition precedent. Other types of wording had the same effect, said the Fifth Circuit.

See the decision in Mertens v. Benelux Corp., 162 F.4th 492 (5th Cir. Dec. 17, 2025) here.