Arizona Supreme Court Refuses to Enforce Arbitration Agreement Based on the Arizona Uniform Arbitration Act

By Neil M. Alexander and J. Greg Coulter of Littler Mendelson, P.C.

In a surprise ruling, the Arizona Supreme Court has declined to enforce arbitration agreements made between an employer and its employees. The initial reading of the Court's ruling in North Valley Emergency Specialists v. Superior Court appears to be a significant blow to employers' ability to enforce arbitration agreements to resolve employment disputes. A detailed reading of the Court's decision, however, establishes that the ruling only addresses the application of the Arizona Uniform Arbitration Act ("AUAA") to arbitration agreements between employers and employees. The Court did not address the enforceability of those arbitration agreements based on Federal statute and common law. Consequently, the Court's narrow holding leaves employers with the ability to continue to enforcement arbitration agreements in Arizona.