Do you include an arbitration agreement in your employment applications? If so, it may not be enforceable, according to a recent decision by the Court of Appeal of California.
Recent case: Melissa Wisdom was an on-call staffing coordinator at Accentcare. She and other coordinators filed a lawsuit alleging that they hadn’t been paid overtime for on-call time and other hours worked.
Accentcare tried to compel arbitration because most of the employees had signed an application that included an arbitration clause on the last page. It stipulated that every dispute between the applicant and employee, if hired, would be resolved through binding arbitration.
The employees testified that no one told them what the agreement meant. Nor did they think that their signature was optional.
The court concluded the agreements were unconscionable. It refused to order arbitration. (Wisdom, et al., v. Accentcare, No. C065744, Court of Appeal of California, 3rd Appellate District, 2012)
Final note: If you have an arbitration agreement in your application or require employees to sign a separate agreement, be sure to have your attorney review it.
Arbitration agreements aren’t just problematic for California courts. The National Labor Relations Board recently ruled that employee arbitration agreements that include class-action waivers are invalid because they restrict employee concerted action under the National Labor Relations Act.
Your attorney can keep you up-to-date on developments, as that position will likely be challenged in court.