Court upholds WaMu’s arbitration agreement

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in Employment Law,Human Resources

According to her complaint, former Washington Mutual Bank assistant branch manager Michelle Williams was fired after she made an “anonymous” call to a company hotline with concerns about a co-worker’s immigration status.

Williams filed suit in state court under the New Jersey Conscientious Employee Act. WaMu had the case removed to federal court and then asked to have the case dismissed because Williams had signed a binding arbitration agreement when she was hired.

Under the agreement, Williams gave up her right to sue in court in return for her employment. The court examined WaMu’s agreement and found it valid. Williams will now have to proceed with her claim before an arbiter.

Advice: Periodically have your attorney review your arbitration agreements in light of recent court decisions. Generally, arbitration agreements are enforceable if the employee receives consideration (in this case, a job) in return for giving up the right to sue. Additionally, the agreement must not be so one-sided that courts consider it an unconscionable contract. Don’t write your own arbitration agreements. Always have your attorney do it.

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