Mutual Promises to Arbitrate Remain Enforceable Despite Challenges to Collective-Bargaining Agreements’ Consideration

1. Introduction

This decision addresses the boundary between judicial review of contractual assent and arbitration of disputes about contractual meaning. The Supreme Court of Ohio held that disputes over the expiration and evergreen provisions of two collective-bargaining agreements belonged in arbitration. The employer’s challenge to the agreements’ overall consideration did not defeat their separately enforceable arbitration clauses, which were supported by the parties’ mutual promises to arbitrate.

The appellant, Administrative Judge Thomas F. O’Malley, represented the Cuyahoga County Court of Common Pleas, Juvenile Division, as employer. The appellee, Laborers’ International Union of North America, Local Union No. 860, represented two groups of employees: juvenile-detention-center employees and employees serving the juvenile court in other capacities.

The central issue was not whether the agreements necessarily continued indefinitely. It was who should interpret their duration and evergreen provisions, and whether an asserted defect in the underlying agreements prevented enforcement of the parties’ agreement to arbitrate.

2. Contractual and Procedural Background

The competing contractual provisions

The two substantially similar agreements contained three important provisions:

• Duration clauses: The agreements stated that they would remain in full force and effect until December 31, 2019.
• Evergreen clauses: The juvenile court agreed to recognize the union and abide by the agreements until a successor agreement was negotiated, the union disclaimed interest, or the employees elected to decertify the union following expiration. These clauses also preserved specified statutory rights and authorities of the juvenile court.
• Arbitration clauses: Unresolved grievances concerning the interpretation, application, or observance of an express contractual provision were subject to arbitration.

The agreements limited the arbitrator to interpretation and application. They prohibited adding to, subtracting from, or modifying the agreements, passing on issues governed by law, or making an award conflicting with law. Those limitations supplied important context, although the Supreme Court did not separately analyze each restriction.

The employer’s declaratory-judgment actions

After negotiations for successor agreements failed, the juvenile court filed two actions seeking declarations that the agreements had expired on December 31, 2019, or were void from inception because the evergreen provisions produced a lack of consideration or violated public policy. The juvenile court also informed bargaining-unit employees that the agreements no longer applied.

Local 860 submitted an emailed grievance alleging noncompliance with the agreements. The court administrator responded that the juvenile court was no longer processing grievances. The union then asserted breach-of-contract and declaratory-judgment counterclaims and moved to compel arbitration.

The trial court’s merits rulings

The trial court initially concluded that the agreements were valid and supported by consideration. It nevertheless held that, although the agreements had been extended beyond December 31, 2019, public policy under R.C. Chapter 4117 prevented continuation beyond December 31, 2020. On that reasoning, the employer could withdraw recognition beginning January 1, 2021, but had breached the agreements by doing so earlier.

In a subsequent ruling, the trial court held that the union’s December 4, 2020 email was not a grievance because treating it as one would violate public policy. It nevertheless awarded Local 860 damages corresponding to union dues it would have received during December 2020.

The appellate proceedings

Both parties appealed. The Eighth District reversed, concluding that the disputes required interpretation of the duration and evergreen provisions and therefore fell within the arbitration clauses. It also reasoned that the duty to arbitrate could have post-expiration effect.

The Supreme Court accepted the employer’s appeal concerning judicial responsibility for deciding contract existence and the claimed incompatibility between perpetual collective-bargaining obligations and a court employer’s judicial discretion.

3. Summary of the Opinion

The Supreme Court affirmed the Eighth District and remanded the matter to the trial court with instructions to order arbitration.

Its principal conclusions were:

1. The arbitration clauses were independently enforceable. The parties’ binding, mutual promises to arbitrate supplied sufficient consideration for those clauses, even while the employer challenged consideration for the agreements as a whole.
2. A contract-formation label does not automatically defeat severability. A court must determine whether the asserted formation defect also challenges formation of the arbitration agreement itself.
3. The disputed provisions fell within the agreed scope of arbitration. Determining how the duration and evergreen clauses operated required interpretation and application of express contractual terms.
4. The courts should not have resolved those contractual merits first. Because the arbitration provisions covered the disputes, the trial court should have compelled arbitration.

Importantly, the Supreme Court did not select the agreements’ actual expiration date, uphold perpetual collective bargaining, or decide the ultimate validity of the evergreen clauses. Its decision determined the proper forum for resolving the disputes.

4. Analysis

A. Precedents Cited and Their Influence

Summary-judgment review

• A.J.R. v. Lute, 2020-Ohio-5168, ¶ 15, and Davis v. Loopco Industries, Inc., 1993-Ohio-195, ¶ 6, supplied the summary-judgment framework: no genuine issue of material fact, entitlement to judgment as a matter of law, and evidence permitting only a conclusion adverse to the nonmoving party when viewed in that party’s favor. A.J.R. v. Lute also supported de novo appellate review. These authorities established the review method rather than the substantive arbitration rule.

Ohio’s arbitration policy and contractual scope

• Hayes v. Oakridge Home, 2009-Ohio-2054, ¶ 15, established Ohio’s strong public policy favoring arbitration. Together with Ignazio v. Clear Channel Broadcasting, Inc., 2007-Ohio-1947, ¶ 18, it supported resolving doubts in favor of arbitration. That policy reinforced enforcement of the clauses, but did not eliminate the need to establish an actual agreement to arbitrate.

• U.S. Acute Care Solutions, L.L.C. v. Doctors Co. Risk Retention Group Ins. Co., 2025-Ohio-5010, provided several central propositions: Ohio favors arbitration, federal arbitration decisions assist interpretation of Ohio law, and a court may deny arbitration on scope grounds only when the clause cannot reasonably be read to cover the dispute. The final proposition directly supported the result because disputes over the duration and evergreen clauses concerned interpretation of express provisions.

• Taylor v. Ernst & Young, L.L.P., 2011-Ohio-5262, ¶ 18, supported consulting federal decisions because the Ohio Arbitration Act tracks the Federal Arbitration Act. Its role was methodological: federal severability and formation principles helped explain Ohio’s statutory framework.

Severability of the arbitration agreement

• ABM Farms, Inc. v. Woods, 1998-Ohio-612, was foundational. It treated an arbitration clause as a separate contractual undertaking and required a fraudulent-inducement challenge to target that provision specifically, rather than merely the surrounding contract. The court used this precedent to reject the categorical proposition that every challenge described as involving contract formation must be judicially resolved before arbitration can occur.

• Kindred Nursing Ctrs., Ltd. Partnership v. Clark, 581 U.S. 246, 254 (2017), supported the proposition that arbitration legislation concerns both enforcement and initial validity. Its citation placed the analysis within a framework that protects arbitration agreements at the formation stage as well as during enforcement.

• Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 445-446 (2006), supplied the federal severability rule. The opinion also relied on its reservation concerning disputes about whether an agreement was ever concluded, including signature and capacity questions. Thus, this precedent supported both independent treatment of the arbitration clause and recognition that genuine assent disputes may require judicial resolution.

• Coinbase, Inc. v. Suski, 602 U.S. 143, 150-151 (2024), was cited alongside Buckeye Check Cashing, Inc. v. Cardegna as authority concerning severability. The Ohio court did not develop a separate analysis of that decision’s factual setting; it used the case to support the arbitration-clause-as-separate-contract framework.

Formation disputes and judicial gatekeeping

• M & M Precision Sys. Corp. v. Interactive Group, Inc., 2000 WL 262655, *2-3 (2d Dist. Mar. 10, 2000), recognized that a party disputing the very existence of contracts containing arbitration provisions cannot be compelled to arbitrate before contractual existence is established. The Supreme Court acknowledged this limitation rather than treating severability as absolute.

• Johnson v. Continental Fin. Co., L.L.C., 131 F.4th 169, 176 (4th Cir. 2025), distinguished challenges to validity from challenges to formation, reasoning that there is nothing to enforce if no contract ever existed. The Ohio court accepted the concern underlying that distinction but declined to make the label “formation” dispositive in every case.

• Granite Rock Co. v. Internatl. Bhd. of Teamsters, 561 U.S. 287, 296-297 (2010), established that courts ordinarily decide disputes over formation of an arbitration agreement. Its essential requirement—that the court be satisfied the parties agreed to arbitrate the particular dispute—remained intact. Here, signed agreements and independently supported arbitration promises satisfied that requirement.

Consideration through reciprocal promises

• Trimble v. Entrata, Inc., 791 F.Supp.3d 615, 627 (D.Md. 2025), supplied the qualification that mutual arbitration promises provide consideration only when binding on both parties. This qualification matters: merely reciprocal wording would not suffice if one party retained an unrestricted ability to avoid its promise.

• Lake Land Emp. Group of Akron, L.L.C. v. Columber, 2004-Ohio-786, ¶ 18, explained that one promise may serve as consideration for the other. Nott v. Johnson, 7 Ohio St. 270, 276 (1857), supplied longstanding Ohio authority that mutual, concurrent promises constitute sufficient legal consideration. Together, they anchored the arbitration clauses’ enforceability in ordinary Ohio contract doctrine.

• Williams-Jackson v. Innovative Senior Care Home Health of Edmond, L.L.C., 727 Fed.Appx. 965, 969 (10th Cir. 2018), applied that principle specifically to arbitration: mutually exchanged promises to arbitrate are not illusory and can supply sufficient consideration. It reinforced the conclusion that the arbitration provisions had their own contractual support.

Judicial employers and collective bargaining

• State ex rel. Ohio Council 8, Am. Fedn. of State, Cty. & Mun. Emps. v. Spellacy, 17 Ohio St.3d 112 (1985), entered the analysis through the juvenile court’s argument that a court employer retains judicial discretion over whether to engage in collective bargaining. The employer maintained that perpetual contractual obligations would undermine that discretion. The Supreme Court did not reject the cited principle or definitively resolve that public-policy objection; it held that the disputed interpretation of the agreements belonged in arbitration.

B. The Court’s Legal Reasoning

1. Identify the arbitration agreement separately from the surrounding contract

R.C. 2711.01(A) generally makes written arbitration provisions valid, irrevocable, and enforceable, subject to ordinary legal and equitable grounds for revoking contracts. Applying severability, the court treated each arbitration clause as a distinct contractual undertaking within the broader collective-bargaining agreement.

That approach prevented the employer from defeating arbitration simply by asserting that the entire agreement was void. If every whole-contract challenge automatically disabled arbitration, parties could evade their chosen dispute-resolution process by pleading a sufficiently broad invalidity theory.

2. Examine the substance of the formation challenge

The court nevertheless recognized that arbitration depends on consent. Disputes over whether a party signed an agreement or had capacity to assent can implicate the arbitration clause itself. Severability cannot manufacture consent where none existed.

The decisive inquiry was therefore whether the employer’s formation objection also undermined formation of the arbitration clauses. Here, the signatures demonstrated an intention to enter the agreements, and neither party disputed the existence of the arbitration provisions. The alleged defect concerned the consequences of the evergreen clauses, not an absence of assent to arbitration.

The opinion thus adopts a substantive inquiry rather than a pleading-label test: calling an objection a “formation challenge” does not establish that the arbitration agreement itself was never formed.

3. Find consideration for the arbitration promises

Both parties promised to arbitrate covered disputes. Because each binding promise supported the other, the arbitration provisions had sufficient consideration independently of the contested consideration for the broader agreements.

This was the critical bridge in the reasoning. The employer’s allegation that the evergreen provisions rendered the overall agreements unsupported did not establish that its separate exchange of arbitration promises lacked consideration.

4. Compare the dispute with the clause’s scope

Having established enforceable arbitration agreements, the court asked whether they covered the dispute. They expressly encompassed disagreements about interpreting, applying, or complying with an express contractual provision.

Deciding whether the December 31, 2019 date controlled, whether the evergreen clauses extended contractual obligations, and how those provisions interacted necessarily required contractual interpretation. The court also placed within that scope the contention that a particular interpretation of the evergreen clauses would render the agreements void for lack of consideration.

5. Preserve the distinction between forum and merits

The result was an order to arbitrate, not a declaration that the union’s substantive interpretation was correct. The Supreme Court did not endorse the trial court’s December 31, 2020 cutoff, fix damages, or determine that the agreements lawfully bound the employer forever.

The Eighth District’s alternative reliance on post-expiration arbitration should likewise be distinguished from the Supreme Court’s stated reasoning. The Supreme Court focused on the independently enforceable clauses and the arbitrability of the disputed expiration question; it did not establish a comprehensive rule governing every grievance arising after an undisputed expiration.

6. Recognize the decision’s limits concerning legal questions

The agreements restricted arbitrators from deciding issues governed by law or issuing unlawful awards. Nevertheless, the Supreme Court characterized these disputes as contractual interpretation and application. The opinion does not separately reconcile every possible legal objection with those restrictions. It should therefore not be read as authorizing arbitrators to disregard statutory limits, expand their contractual powers, or decide every conceivable challenge to judicial authority.

5. Potential Impact

More focused challenges to arbitration

Parties opposing arbitration must explain how an alleged defect affects assent to, consideration for, or enforceability of the arbitration provision itself. A challenge directed only at the surrounding agreement may not suffice, even when framed as a formation objection.

Greater significance for evergreen-clause drafting

Employers and unions should expressly coordinate fixed expiration dates, continuation clauses, termination mechanisms, and arbitration obligations. Where these provisions are ambiguous, a clause covering interpretation and application may place the dispute before an arbitrator rather than a court.

Limits on merits-first litigation

The decision discourages courts from resolving disputed contractual duration or enforceability theories before addressing an applicable motion to compel arbitration. The trial court’s detailed merits rulings did not displace the agreed dispute-resolution mechanism.

Consequences for public and judicial employers

A judicial employer’s institutional status does not, by itself, negate an arbitration promise it made. At the same time, the decision does not establish that such employers must bargain indefinitely or that every evergreen provision is lawful.

Application beyond collective bargaining

Although the dispute arose in labor relations, its central reasoning concerns ordinary contract law and Ohio’s Arbitration Act. Other agreements containing mutually binding arbitration promises may present similar questions about whether a whole-contract consideration challenge reaches the arbitration clause.

6. Complex Concepts Simplified

Evergreen clause

A provision continuing contractual obligations beyond a stated expiration date until a specified event occurs. It does not necessarily mean the agreement lasts forever.

Severability in arbitration

The arbitration promise is examined separately from the surrounding contract. A defect alleged against the larger agreement does not automatically invalidate that promise.

Consideration

The bargained-for exchange supporting a contract. Here, each party’s binding promise to arbitrate supplied value in exchange for the other’s promise.

Illusory promise

A supposed commitment that does not actually bind the person making it. The court found genuine reciprocal arbitration obligations here.

Void ab initio

Invalid from the outset, rather than valid initially and terminated later.

Substantive arbitrability

Whether the parties agreed to arbitrate the kind of dispute presented. It differs from deciding which party should win that dispute.

Formation versus validity

Formation concerns whether a contractual commitment came into existence. Validity concerns whether that commitment is legally enforceable. The court emphasized examining whether the particular objection also undermines the arbitration agreement.

De novo review

Fresh appellate consideration of a legal question without deference to the lower court’s conclusion.

Condition precedent

An event that must occur before a specified contractual consequence follows. The union relied on the evergreen clauses’ listed events as prerequisites to ending the continued obligations.

7. Conclusion

O'Malley v. Laborers' Internatl. Union of N. Am., Local 860 establishes that mutually binding arbitration promises can remain enforceable despite a consideration challenge to the collective-bargaining agreements containing them. Courts must determine whether the alleged defect actually reaches formation of the arbitration agreement, rather than relying solely on how the challenge is labeled.

Because the disputes concerned interpretation and application of the duration and evergreen clauses, arbitration was required. The decision’s broader significance is its protection of agreed arbitration procedures without abandoning the foundational requirement of genuine contractual consent.