Ask a California employment lawyer:
Do I have to sign an arbitration agreement just because my boss asked me to sign it?
Congratulations! You have a new job. Your boss has been been showing you the ropes, you’re meeting people, and you just learned where the break room is located. You're on top of the world. But then your boss hands you an arbitration agreement. “What’s this?” you ask. Your boss says, “This agreement says that if we ever decide to sue each other, we waive our rights to go to court. We will arbitrate our claims.” “The company is already planning to sue me,” you think. “But I’m not thinking about suing them. I just found the copy machine!”
No, your employer is not trying to sue you. However, your employer is attempting to protect itself if you decide to sue them for violating your rights. Employers routinely issue arbitration agreements to employees. Your employer wants to prevent you from having your claims for wrongful termination, discrimination, harassment, or whistleblower retaliation decided in front of a jury.
What are your rights if your employer presents you with an arbitration agreement?
If you are presented with an arbitration agreement, you don’t have plethora of options if you want the job. If you don’t sign, you may not keep your job.
However, there are a few things you can do to help enforce your rights:
Read through all of those long, boring documents carefully.
Reviewing mountains of paperwork on your first day of work, while challenging, is important. Your employer may present you with an arbitration agreement in a separate contract,or bury the arbitration agreement in other documents (like an employment contract, a hiring letter, or an employee handbook).
Quite simply, don't sign anything acknowledging you've read something unless you actually have read it! Also, don't sign anything that says you agree to the terms unless you have: 1) read it and 2) agree to them.
If the arbitration agreement is only contained within your handbook, the agreement is probably unenforeable.
Many times, an employer buries the agreement to arbitrate in an employee handbook, where you are asked to sign an acknowledgement of receiving the handbook. But is an acknowledgement of receipt really an agreement? Most of the time, the answer is no.
A fundamental element of any contract is that you have to actually agree to the contract. For example, an employee in Sparks v. Vista Del Mar Child and Family Servs., sued his employer for wrongful termination. The employer tried to force the case into arbitration. However, the court ruled that because the employee had only signed an acknowledgement of receipt of his handbook, he didn’t actually knowingly agree to arbitrate his claims.
Is an acknowledgement of receipt really an agreement? Most of the time, the answer is no.
I had a case where the employee worked for a major, multi-million dollar national corporation, in which the arbitration agreement had been deemed valid in multiple other cases. I opposed the motion to compel arbitration on the basis that my client had merely signed an acknowledgement in the handbook to arbitrate the claims, and had not agreed to arbitrate. The court agreed with me and the case proceeded in court.
Clearly, if the arbitration agreement is merely buried in your employee handbook, there’s a good possibility that the agreement is invalid.
You face certain risks if you refuse to sign the agreement.
Absent a gun to your head, you can always refuse to sign an agreement. However, if you refuse to sign an arbitration agreement, you do run the risk of losing your job. Your employer can fire you because you’re an at-will employee who refuses to sign an agreement. While it seems unjust, this is not illegal and it is not wrongful termination.
Some employers will negotiate the agreement.
However, some employers will negotiate the agreement, especially if you are a higher wage earner and they fought hard to recruit you to the position. Your employer may decide they want you more than they want an arbitration agreement. Even if they don't eliminate the arbitration agreement requirement altogether, they may modify the terms depending on your concerns. We can help you to negotiate those terms.
You still have rights to file a claim with a government agency even if you signed a valid arbitration agreement.
Arbitration agreements do not bar you from filing a claim with a government agency. You can still file a complaint with the Department of Fair Employment and Housing or the EEOC if you feel your were discriminated against or harassed by your employer, or with the Department of Industrial Relations, Division of Labor Standards Enforcement (“DLSE”) if you weren’t paid all of your wages. This is because the arbitration agreement applies to you, not to the government.
Fight for justice! Know your rights!
If you are currently embroiled in a dispute with your employer and your boss is telling you that you have to take the claim to arbitration, call us so that we can discuss whether or not you signed a valid arbitration agreement.
Please make an appointment for a free consultation in our Newport Beach office. You can contact us by email or phone. We want to help.