A few years ago, there was a lot of buzz surrounding so-called "Mandatory Arbitration Agreement" that were included in nursing home packages as one of several documents a resident or their designated representative had to sign upon admission. There was not a lot known about these arbitration agreements when they first surfaced. Questions arose regarding their validity, enforceability, and application.
In Massachusetts, there have been at least two decisions that have shed some light on these agreements. In 2007, the Supreme Judicial Court heard arguments in the case of Miller v. Cotter, 448 Mass. 671 (2007) regarding whether an arbitration agreement executed in the context of a resident's admission was unconscionable, which would render the agreement void. While the Supreme Judicial Court held that the arbitration agreement they reviewed was not unconscionable, they did hold that because there is no clear, all-purpose definition of unconscionable, each review of unconscionability would have to be made on a case-by-case basis. The SJC held that deciding factors for finding an arbitration agreement unconscionable would be whether the contract provision could result in unfair surprise and was oppressive to the allegedly disadvantaged party.
In 2008, the Massachusetts Appellate Court heard arguments in the matter of Constantino v. Frechette, 73 Mass. App. Ct. 352 (2008) regarding whether the family of a deceased nursing home resident could maintain a lawsuit against individuals nurses not specifically parties to the contract. The nurses tried to argue that they were intended third party beneficiaries of the contract and should be bound by it. The court held that only those parties that were named in the contract would be covered by the agreement. The court held that the contract could have included language to include agents, servants, and employees of the nursing home and because it did not, the individual employees were not covered by the agreement.
There was some momentum a few years back for Congress to enact legislation to ban these types of agreements in the nursing home setting, but the bills in both the House and the Senate stalled in the "committee stage."
Since not all arbitration agreements are created equal, it is important to consult with a personal injury attorney to determine whether the agreement you or a loved signed would likely be held valid under current Massachusetts case law.
If you have questions regarding an agreement you have been asked to sign or one that you have already signed, please do not hesitate to contact Attorney Susan Bourque.
