We are increasingly seeing more agreements between fiduciaries and clients that contain mandatory arbitration provisions. Typically the agreements are signed by an “authorized representative” of the fiduciary and personally by the client. But should other persons within the fiduciary’s organization also be signing on to the arbitration provision?
Although not a fiduciary litigation case, the United States Court of Appeals for the Fifth Circuit decided in DK Joint Venture 1 v. Weyand that a corporation’s CEO and CFO – who were not signatories to their corporation’s arbitration agreements – were not bound to the arbitration agreement simply by virtue of being agents of the corporation.
This decision has some applicability for arbitration agreements between fiduciaries and clients. Who should sign an arbitration agreement depends on what you’re trying to accomplish with it.