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Ensure that arbitration agreements are clear

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in Discrimination and Harassment,Employment Law,Human Resources

Employers may be sold on the advantages of arbitration over litigation and want to give the proc­ess a try. But if they don’t do it just right, chances are they’ll end up spending more time and money.

That’s because employees may go to court to challenge an employer’s right to arbitration, adding what amounts to a second lawsuit to the underlying complaint.

Recent case: Maureen Hergenreder was hired as a nurse for a senior living group. Before long, she was diag­­nosed with cancer and had to take a leave of absence for treatment. When she was ready to return, she learned she had lost her job because she had not worked long enough to accumulate either FMLA leave or other protected time off.

She sued, alleging disability discrimination. The employer countered that Hergenreder had to take her case to arbitration because she had agreed to arbitrate all employment claims when she took the job.

Hergenreder said she never agreed to arbitrate any claims. Her former employer claimed that Hergenreder had acknowledged that she got a copy of the employee handbook, which contained an arbitration waiver.

First, the court pointed out that the handbook included several ­disclaimers, each specifying that the handbook was not a contract. Second, there was just one cryptic reference to arbitration in the rather long handbook. This consisted of a single sentence that said “Dispute Resolution Process: Please refer to the Eby Companies Dispute Resolution Procedure (DRP) for details.”

The court said the statement, buried in a document that was not a contract, did not create a separate contractual agreement for all employment disputes to go to arbitration. It said Hergen­reder could therefore take her disability discrimination case to federal court. (Hergenreder v. Bickford Senior Living Group, No. 10-1474, 6th Cir., 2011)

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