Will Idaho courts enforce this arbitration clause, and does it matter that one party is the other's employee?
Yes, with one statutory carve-out. Idaho's Uniform Arbitration Act, Idaho Code § 7-901: "A written agreement to submit any existing controversy to arbitration or a provision in a written contract to submit to arbitration any controversy thereafter arising between the parties is valid, enforceable and irrevocable, save upon such grounds as exist at law or in equity for the revocation of any contract." The same section then carves out one category entirely: "This act does not apply to arbitration agreements between employers and employees or between their respective representatives (unless otherwise provided in the agreement)." Once a valid, non-carved-out agreement exists, Idaho Code § 7-902(a) makes enforcement close to automatic: "On application of a party showing an agreement described in section 7-901... and the opposing party's refusal to arbitrate, the court shall order the parties to proceed with arbitration, but if the opposing party denies the existence of the agreement to arbitrate, the court shall proceed summarily to the determination of the issue so raised and shall order arbitration if found for the moving party."
The trap
The employer-employee carve-out is an OPT-IN, not an automatic bar: § 7-901's own parenthetical ("unless otherwise provided in the agreement") means the parties can contract the Uniform Arbitration Act back into an employment relationship by saying so in the agreement; silence leaves the Act inapplicable to that agreement, not the arbitration clause void. Do not assume every dispute touching an employment relationship falls inside the carve-out, either: an arbitration clause in an agreement between two BUSINESSES that happen to also have an employment-adjacent relationship, or in a contract other than the employment contract itself, may not be "between employers and employees" in the sense the statute means. And do not assume the Act's near-automatic order-to-arbitrate mechanism in § 7-902(a) forecloses every defense: the statute expressly preserves "such grounds as exist at law or in equity for the revocation of any contract" (fraud, unconscionability, lack of mutual assent, and the like), and a party can still force the summary threshold determination by denying the agreement's existence in the first place. What that threshold fight cannot be about is the merits: § 7-902(e) says an order for arbitration "shall not be refused on the ground that the claim in issue lacks merit or bona fides or because any fault or grounds for the claim sought to be arbitrated have not been shown." The mirror of (a) is (b), which lets a party ask the court to stay an arbitration "on a showing that there is no agreement to arbitrate", an issue "forthwith and summarily tried"; and once an order or an application for arbitration is made, § 7-902(d) stays the court action, in whole or as to the severable issue.
6 authorities
- statuteIdaho Code § 7-901enactment date not established
The words that state the rule
A written agreement to submit any existing controversy to arbitration or a provision in a written contract to submit to arbitration any controversy thereafter arising between the parties is valid, enforceable and irrevocable, save upon such grounds as exist at law or in equity for the revocation of any contract.
- statuteIdaho Code § 7-901enactment date not established
The words that state the rule
This act does not apply to arbitration agreements between employers and employees or between their respective representatives (unless otherwise provided in the agreement).
- statuteIdaho Code § 7-902enactment date not established
The words that state the rule
On application of a party showing an agreement described in section 7-901, Idaho Code, and the opposing party’s refusal to arbitrate, the court shall order the parties to proceed with arbitration, but if the opposing party denies the existence of the agreement to arbitrate, the court shall proceed summarily to the determination of the issue so raised and shall order arbitration if found for the moving party, otherwise, the application shall be denied.
- statuteIdaho Code § 7-902enactment date not established
The words that state the rule
(b) On application, the court may stay an arbitration proceeding commenced or threatened on a showing that there is no agreement to arbitrate. Such an issue, when in substantial and bona fide dispute, shall be forthwith and summarily tried and the stay ordered if found for the moving party. If found for the opposing party, the court shall order the parties to proceed to arbitration.
- statuteIdaho Code § 7-902enactment date not established
The words that state the rule
(d) Any action or proceeding involving an issue subject to arbitration shall be stayed if an order for arbitration or an application therefor has been made under this section or, if the issue is severable, the stay may be with respect thereto only. When the application is made in such action or proceeding, the order for arbitration shall include such stay.
- statuteIdaho Code § 7-902enactment date not established
The words that state the rule
(e) An order for arbitration shall not be refused on the ground that the claim in issue lacks merit or bona fides or because any fault or grounds for the claim sought to be arbitrated have not been shown.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.