With all the talk of runaway lawsuits and huge jury awards, plus attorneys’ fees, it’s no wonder employers may be tempted to require employees to agree to arbitrate all employment-related disputes.
But before you pull a boilerplate contract off the shelf or from the Internet, consider this: California has some of the toughest standards for arbitration agreements, and missing just one fine point can doom the entire agreement.
Two recent cases involving arbitration clauses in employment demonstrate the danger of relying on arbitration agreements to avoid litigation. Federal courts decided one case, while California’s appellate courts decided the other. Both found unconscionable the arbitration agreements employers used. Therefore they were invalid.
Case No. 1: Mark Gelow and several fellow employees worked as branch managers for a mortgage company. When their jobs were eliminated and several accounts that had been u...(register to read more)
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