The Sophisticated Employer Blog

With the passing of the Federal Arbitration Act (FAA), Congress attempted to overcome the judiciary’s historical aversion to arbitration agreements by deeming them valid, irrevocable and enforceable.

As a result, when arbitration is clearly and unmistakably assented to and interstate commerce is involved, subject to limited exceptions, courts are obligated to enforce these agreements pursuant to the FAA. Courts begin with the presumption that national policy favors arbitration. Further, courts lack authority to set aside arbitration awards unless the arbitration agreement itself is invalid.

What are the FAA’s Limits?

 Barnes v. G4S Secure Solutions (USA) Inc., Nos. 25-1349/1351, 2026 WL 296990 (6^th Cir. Feb. 4, 2026), illustrates that the federal policy favoring arbitration does not override Michigan contract interpretation principles that focus on the parties’ intent. In its unpublished decision, the appellate court declined the defendants’ invitation to depart from the contract’s plain language.

The case arose from a race discrimination class action lawsuit brought by a former security officer, Barnes, and former colleagues at a building in downtown Detroit, known as the Detroit Renaissance Center. At issue was the exclusion clause removing “claims involving an employee who is covered by a collective bargaining agreement” from arbitration.

The appellate court acknowledged that the arbitration agreement was valid and binding and that Barnes himself, a non-union supervisory employee, fell within its general scope. However, Barnes also asserted claims against his coworkers who were lower-level employees covered by a collective bargaining agreement at the time of the dispute. Because the claims “involved” such employees, the exclusion clause applied, which removed the dispute from the agreement’s reach. Consequently, the appellate court affirmed the lower court’s rejection of defendants’ motion to compel arbitration.  

This decision highlights an important limit on the national arbitration policy. Although precedent compels courts not to deny arbitration “unless it may be said with positive assurance” that the clause can’t be interpreted to cover the dispute, parties are still free to expressly exclude any categories of disputes. AT&T Techs., Inc. v. Commc’ns Workers of Am., 475 U.S. 643, 650 (1986).

What Could Have Defendants Done Differently?

Hindsight bias is often strongest for contract drafters who realize that a slight deviation in wording could have forced the court’s hand in their favor. Employment contract authors are not exempt from such pitfalls.

In Barnes, the defendants urged the trial court to interpret the exclusion clause as applying only to claims brought by union employees. But the agreement used the broader term “involving,” combined with the indefinite phrase “an employee” instead of the more precise “the employee.” These drafting choices proved decisive. More exact verbiage could have lent greater credence to defendants’ reading, potentially leading the trial court to compel arbitration and aligning the contract with their apparent expectations.  

What Actions can Unionized Michigan Employers Take?

Boilerplate arbitration provisions are common in employment agreements. But boilerplate language can lead to legal headaches down the line if it isn’t carefully tailored.

Employers, especially those operating in unionized environments, should consider:

• Probing exclusion clauses for unintended breadth
• Defining key terms such as “involving” or “covered employee” or “an employee”
• Avoiding generic boilerplate language where union and non-union employees interact
• Ensuring consistency between CBA relationships and arbitration provisions
• Reviewing longstanding agreements drafted before workforce structure changes

While the parties may have shared a different understanding during negotiations, courts will first look at the written text and its ordinary meaning unless the agreement provides specific definitions. If the text is clear, courts typically won’t scrutinize the parties’ intent or behavior. Therefore, precision in drafting controls, no matter how strongly national policy favors arbitration.