Legal Translation of Arbitration Agreements

Chinese to English Translation of Arbitration Agreement

Legal translation of contracts, including translation of arbitration agreements, plays an important role in the practice of law.  Arbitration agreements continue to be utilized by businesses and employers as a mechanism for reducing their exposure and costs incurred in defending lawsuits filed against them. Such agreements may later pose an obstacle to individuals who do not understand the ramifications of the agreement and, in particular, to individuals who do not understand English. In the case discussed below, the court upheld an arbitration agreement signed by three Chinese-speaking individuals who failed to have the agreement translated or explained to them before signing it.

In Zhu v. Hakkasan NYC LLC, three Chinese plaintiffs filed a class action lawsuit against their employer for violations of the Fair Labor Standards Act (FLSA), the New York Labor Law (NYLL), and also asserted separate individual discrimination claims. The three representative plaintiffs were employed as sous chefs at the defendant’s restaurant prior to filing suit. Plaintiffs made numerous allegations in support of their lawsuit, including allegations that they were denied overtime, were misclassified as salaried employees, were required to work more than their Caucasian colleagues, and were denied the same amount of paid holidays, among other things. Relative to the plaintiffs’ lawsuit was the fact that their native language was Mandarin Chinese. Plaintiffs were also unable to read or understand English.

The English Arbitration Agreement without Chinese Translation

A main point of contention between plaintiffs and defendants was the validity of the parties’ arbitration agreement. Prior to their employment, and as a condition of their employment, the plaintiffs signed a “dispute resolution/arbitration agreement” which stated that they agreed to “waive [their’ right to a court and/or jury trial and agreed that disputes relating to his/her employment, or the termination of such employment, shall be decided by a mutually-agreed upon Arbitrator in full and final arbitration.” By signing this agreement, the plaintiffs essentially agreed to waive their right to pursue any employment-related claims in federal court and agreed to have an arbitrator, rather than a judge or a jury, decide the merits of any disputes. Pursuant to this agreement, after the plaintiffs filed their class action lawsuit, the defendants filed a motion with the court requesting that the plaintiffs be compelled to arbitrate their claims rather than proceed in federal court.

In response to the defendant’s motion to compel arbitration, the plaintiffs argued that it would be unconscionable for the court to uphold the arbitration agreement. Specifically, the plaintiffs claimed that they never received translated versions of the agreement in their native language. The defendants informed the court that they were informed by the defendant’s Chinese-speaking secretary that the arbitration agreement had to be signed immediately. Thus, the plaintiffs claimed that they never had the opportunity to investigate or understand the terms of the agreement.

Federal Court Upholds Arbitration Agreement Signed by Chinese Chefs in Employment Dispute

The court ultimately granted the defendants’ motion to compel arbitration, finding that the arbitration agreement was valid and enforceable. The court began its analysis by explaining that that state law determined whether the parties agreed to arbitration and, under New York law, the defendants had the burden of proving the existence of a valid arbitration agreement. The court also explained that, under federal law, the fact that an agreement is signed creates “presumptive evidence” of the parties’ intent to enter into a binding agreement. The court further explained that although it is possible for a party to a signed contract to be relieved from its obligations if the court finds the contract unconscionable, according to New York law, a contract is only unconscionable when it is “grossly unreasonable” or unconscionable in light of business practices at the time. In this case, the court found that the plaintiffs’ inability to speak or understand English or the terms of the contract did not satisfy the “unconscionability” requirement under the law.

The Burden is On the Employee to Have Arbitration Agreement Translated or Explained

In arriving at this decision, the court explained that language barriers do not justify a finding of unconscionability where there is no evidence that the plaintiffs were subjected to “high pressure tactics” to induce the plaintiffs to sign on the spot without reviewing the terms. The court cited to Ragone v. Atl. Video at the Manhattan Ctr., 595 F.3d 115, 121 (2nd Cir. 2010), in which the court stated that “New York courts have repeatedly ruled that even the fact that a prospective employee possesses an imperfect grasp of the English language will not relieve the employee of making a reasonable effort to have the document explained to him.” In granting the defendant’s motion to compel arbitration, the court considered the fact that there was no evidence that the plaintiffs ever took any steps to have the arbitration agreement explained to them or that they asked the defendant’s secretary, who spoke Chinese, to translate or explain the English document to them. Likewise, the court reasoned that the plaintiffs never attempted to negotiate the terms of the arbitration agreement, nor did they ever requested a translated version of the agreement. Furthermore, plaintiffs did not allege that the defendants used high pressure tactics to induce the plaintiffs to sign the documents. Moreover, the court explained that the FLSA and federal case law support the enforceability of arbitration agreements in the employment law context.

The case is Zhu v. Hakkasan NYC LLC, et al., Court No. 16 Civ. 5589 (KPF) decided on November 28, 2017 by the United States District Court for the Southern District of New York.

This law translation blog article should not be construed as legal advice. You should always consult an attorney regarding your specific legal needs.

Contact All Language Alliance, Inc. to inquire about translation services contract, or to have your arbitration agreement translated from English to Mandarin Chinese, French, Korean, Arabic, Mongolian, Persian, Somali, Spanish, or any other language, and to have a foreign language arbitration agreement translated to English.

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