Many employees never even bother to read the employee handbook. That’s understandable. They are long, boring, and mostly full of lawyery language that makes the average joe want to shoot himself. I get it.
Well, many California employers have employee handbooks (as they should), and many of them include within the handbook an arbitration clause. What is arbitration and why should the employee care? According to the American Arbitration Association:
Arbitration is the submission of a dispute to one or more impartial persons for a final and binding decision, known as an “award.” Awards are made in writing and are generally final and binding on the parties in the case.
Arbitration basically is an alternative to filing a lawsuit in court. There are many advantages and disadvantages to arbitration. But I’m not writing here to talk about that. What I’m interested in, is whether or not they are enforceable. Meaning, if you sue your boss for sexual harassment, discrimination, or some other employment claim, can you employer force you into arbitration to take your claim out of the court system?
According to a recent case, Sparks v. Vista Del Mar Child & Family Services, arbitration policies set forth in employee handbooks generally do not amount to an enforceable agreement to arbitrate claims. The handbook at issue included language stating that the handbook was not an express or implied contract. As is the case with most companies, employees were required to sign a form acknowledging that they had received the handbook. However, the acknowledgement did not specifically allude to the arbitration policy or separately include any agreement to arbitrate.
Under California law, an arbitration provision cannot be incorporated into an employment agreement unless the incorporation clause specifically mentions arbitration. Chan v. Drexel Burnham Lambert, Inc. (1986) 178 CA 3d 632, 638–639. Thus, arbitration agreements can be enforceable, if the employer includes arbitration language and information into the acknowledgement form that is signed by the employee. Of course, there are always exceptions.
So, if you are an employer and want to arbitrate claims, your best bet is to hire a great employment defense law firm to write your handbook and acknowledgment. Whereas, if you are an employee and want access to the jury system (always a good idea if you’re a plaintiff), your best bet is hire a great employment plaintiff’s attorney. Don’t just hire anyone, hire someone who specializes in employment law. That will dramatically improve your chances of getting your claim into court.
Branigan Robertson is a California employment lawyer who exclusively represents employees in workplace disputes. He focuses his practice on sexual harassment, wage & hour, wrongful termination, and retaliation. Visit his website at BRobertsonLaw.com or call his office at 949.667.3025.
One Response to Arbitration Clauses in Employee Handbooks Are Hard to Enforce
Cynically, these clauses are sometimes used to delay and obfuscate by employers, in the same way that some big employers sometimes also have a 3 or 4 stage grievance process. Many employees will give up in these situations.