Arbitration In The Workplace, What's New?
SUMMARY: Two recent appellate court decisions remind employers about California’s commitment to uphold employers’ rights to enforce arbitration agreements. These cases follow last year’s US Supreme Court decision in the Epic Systems matter and stress the importance of carefully crafting arbitration clauses.
RULE: A recent California appellate panel ruled that a Sohnen Enterprises worker was bound by her arbitration agreement, even though she objected to it and refused to sign it. The Court enforced it because her employer had made clear to her it would view her continued employment as consent to arbitrate disputes, notwithstanding her objection and refusal to sign the agreement.
In the same week, however, a California appellate panel refused to enforce an arbitration agreement against a non-English speaking employee where the English-only agreement was more than two dozen pages, required both parties to pay for arbitration, limited the parties’ discovery rights, limited the damages an arbitrator could award and contained other provisions courts have found unconscionable, and therefore unenforceable. These drafting errors give courts an easy way to reject arbitration agreements.
TAKEAWAYS: In states like California, which are fertile ground for rampant and expensive wage and hour class actions, arbitration agreements containing class action waivers provide great protection to employers. Employers must, however, remain vigilant to ensure they carefully edit their arbitration agreements to track changes in the law. Other things employers may wish to do to increase their chances of a court enforcing their arbitration agreements include ensuring the employees sign the agreement and the business maintains the signed copy in the personnel file. However, in the rare circumstance where an employee refuses to consent to arbitration, as the worker did in the Sohnen Enterprises case, contact our office for the best way to handle the situation.
Erika Diaz v. Sohnen Enterprises;
Please contact Beth Schroeder for more information.