Don’t hide mandatory arbitration clause in application

by on
in Employment Law,Human Resources

If you want to avoid expensive and time-consuming legal fights and the uncertainty a jury brings to the equation, a mandatory arbitration agreement might seem like the most attractive way to settle employment law disputes. By pushing legal challenges into arbitration, you may save time and money—but only if you can get the agreement to stick.

As the following case shows, a poorly conceived and executed agreement might cost you a lot more, not less.

Recent case: Mary Pronovost claimed her former employer, Aurora Loan Services, illegally fired her. When she sued, the employer pointed out that Pronovost had agreed to arbitrate any claims. Apparently, hidden in the small print on the back of the employment application was an arbitration agreement.

Pronovost asked the court to toss out the agreement. She pointed out that she had orally accepted the job even before she filled out the application, and that she never saw the small print. The Court of Appeal of California agreed with her. It said that the buried small print made the agreement invalid. (Pronovost v. Aurora Loan Services, No. D049196, Court of Appeal of California, 4th Appellate Division, 2008)

Advice: Get an attorney to help you draft your mandatory arbitration agreements and explain how to get employees to sign it.

Leave a Comment