Rogue CFO’s Arbitration Deal Tossed by North Carolina Court (1)

A consulting firm contract with an arbitration provision signed in “secret” by a company CFO can’t bind the parties to out-of-court adjudication, the North Carolina Appeals Court ruled Tuesday.

The decision spotlights how even high-ranking employees in a firm might not have the legal agency to bind a company to arbitration, forcing vendors who anticipated enforcing their deals in private to argue over charges in open court. That’s where San Antonio-based HJH Consulting, which sought more than $200,000 for work it did helping a golf equipment maker secure better deals from vendors, now finds itself.

The manufacturer, Clemmons, N.C.-based JRM, ...