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Now what? Employee won’t OK arbitration

by on
in Employment Law,Human Resources

Employers that decide to add an arbitration agreement to their conditions of employment often try to get every employee’s signature on the document. That, the reasoning goes, shows that the employees agreed to arbitrate claims and that there is a valid contract in place.

But what if some employees don’t sign? What will you do? Can you count on the agreement being binding anyway? That’s unclear.

Recent case: Susan worked in HR and was responsible for rolling out a revised handbook that included an arbitration clause as a condition of employment. The agreement waived the right to a jury trial and required all employment-related claims to go to arbitration. Susan was supposed to get every employee’s signature.

She got almost everyone to sign. Then, before she herself signed, she quit. The reason soon became obvious: She took her own sexual harassment complaint to court and wanted a jury trial.

Her former employer argued that the agreement was still binding because it clearly stated that signing was a condition of employment.

The court disagreed. It concluded that there was no agreement between the employer and Susan because she never signed on. Plus, she quit before the company had come up with a strategy for dealing with employees who refused to sign. (Gorlach v. The Sports Club, No, B233672, Court of Appeal of California, 2nd Appel­­­­late District, 2012)

Final note: Decide ahead of time how you will handle employees who won’t sign. Will you fire them and rehire them if they agree to the terms? Your attorney may have language to include in the agreement that employees who don’t sign are nonetheless bound if they continue to work for the company. Another option is to actually ­terminate nonsigners.

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