In the opinion written by Circuit Judge Michael A. Chagares and joined by Circuit Judge Marjorie O. Rendell, Chagares said the court declined to create an exception to the objective theory of contract formation where a party is ignorant of the language in which a contract is written.
Reversing a decision by the U.S. District Court for the Virgin Islands, which found that the employee was not bound by the clause and could pursue an unlawful termination claim, the court determined that, “in the absence of fraud, the fact that an offeree cannot read, write, speak, or understand the English language is immaterial to whether an English-language agreement the offeree executes is enforceable.”
The court concluded that Juan Morales’ signature manifested his assent to the entire agreement and he entered into the agreement with Sun Constructors without fraud or duress, therefore he is bound by the arbitration clause.
The judges noted that Morales was not claiming fraud and was not alleging that Sun misrepresented the contents of the agreement to him. In addition, according to the opinion, there was no evidence that Sun tried to hide the arbitration clause, as it comprised about one-half of the agreement.
Although Sun enlisted the help of another employee to translate the agreement for Morales (an employee who told the court he understood about 85% of English), it was Morales’ obligation to ensure he understood the agreement before signing, the court said. According to the opinion, Morales did not ask the employee to translate the document word-for-word or ask to take the agreement home and have it translated, nor did he request a copy of the employment contract.
In a dissenting opinion, Circuit Judge Julio M. Fuentes disagreed with the majority that there can be "special circumstances" making a contract void, but these circumstances exist only in a case where a fraud has been perpetuated.
Comparing the case to another in which a ruling was found in favor of the former employee, Fuentes noted that Morales was unaware of what he did not know about the contract, not because he could not read English and acted negligently by not bothering to learn the terms of the contract; but because the translation he was presented with by the other party to the contract (which he had no reason to suspect and no immediate way to verify) was incorrect or incomplete.
"[W]hen Sun made the decision to insert itself between Morales and the contract, it created a situation where lack of mutual assent could, and did, occur," Fuentes said in his dissent.
Not only did the employee who was translating the document at Sun's direction fail to inform Morales that the agreement contained an arbitration clause, but Sun was under pressure to hire Morales in an expedient manner and urged him to accept the translation and sign the agreement immediately, Fuentes noted. Because he does not believe it was negligent or otherwise improper for Morales to rely upon the translation provided by Sun, Fuentes said he agreed with the District Court that Morales did not "manifest an intention" to be bound by the arbitration clause.
The opinion in Morales v. Sun Constructors, Inc. is here .