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Seeking enforceable arbitration agreement? Be certain it’s not tilted in your favor

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in HR Management,Human Resources

Want to arbitrate employment disputes rather than drag them out in state or federal court? Then make sure the arbitration agreement you use is fair to both sides and doesn’t include any obviously one-sided clauses favoring the employer.

Recent case: Jose worked for a property management firm. The company decided to implement an arbitration process for all employment disputes and told employees they had to sign the agreement or face discharge. Jose signed.

Later, after Jose left the job, he sued, alleging wrongful termination, discrimination and other claims.

The employer asked the court to send the case to arbitration, citing the agreement Jose had signed.

Jose argued the agreement wasn’t valid because he had been forced to sign on pain of discharge. The em­­ployer countered that the agreement itself was fair, even if the signing process was perhaps somewhat coerced.

The court agreed with the employer. The arbitration agreement provided for binding arbitration as the exclusive resolution process for all claims arising from employment, whether brought by Jose or the company. It called for a single, neutral and impartial arbitrator from the American Arbitration Association.

Plus, the statute of limitations, discovery, relief, venue, arbitration costs and attorneys’ fees provisions all appeared reasonable and fair to Jose. His case was dismissed. (Reynoso v. Bayside Management, No. 13-CV-4091, ND CA, 2013)

Final note: Always have a qualified attorney draft arbitration agreements, especially if the agreement covers California employees. Don’t risk having the contract tossed on a technicality.

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