"although the employees signed the handbook, they only acknowledged receipt; the acknowledgment did not reference consent to arbitration"
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ARBITRATION AGREEMENTS
The Devil Is In The Details
By Christopher W. Olmsted, Esq.
Some employers seek to have all employment related claims submitted to binding arbitration, instead of a civil jury trial. This must be accomplished by means of an arbitration agreement.
California case law includes a multitude of cases where courts have refused to enforce arbitration agreements on account of technical flaws in the agreements. A recent Fourth District case, Mitri v. Arnel Management Co. highlights yet another pitfall.
In that case, the employer included an arbitration policy in its handbook. The handbook stated that "[a]ny dispute arising out of employment with the Company, as allowed by law, will be settled by binding arbitration."
However, the handbook also stated that "[a]s a condition of employment, all employees are required to sign an arbitration agreement," and further stated that "[e]mployees will be provided a copy of their signed arbitration agreement."
Unfortunately, the employer neglected to have employees sign a separate arbitration agreement. Moreover, although the employees signed the handbook, they only acknowledged receipt; the acknowledgment did not reference consent to arbitration. Consequently, in a discrimination lawsuit, the court refused to order the matter to arbitration. The employee was entitled to a jury trial in spite of the employer's arbitration policy.
Employers who implement an arbitration policy are therefore forewarned: be sure to obtain signed written consent from employees.
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This article is intended as a brief overview of the law and are not intended to substitute as legal advice. Any questions or concerns regarding any statute or case law should be addressed to a licensed attorney. Copyright © 2008 by Barker Olmsted & Barnier, APLC. San Diego, California. All rights reserved.
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