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Want to require an arbitration agreement? That’s fine as long as it’s fair to employees

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in Employment Law,Human Resources

Here’s some good news for employers that want to use arbitration as a way to resolve employment disputes instead of relying on federal or state courts: Imposing a fair arbitration policy on applicants as a condition of employment is fine.

Once the applicant “takes” the take-it-or-leave-it arbitration agreement by accepting the job after having a chance to review it, she’s stuck with it.

Recent case: Daphne sued her former employer after losing her job at the end of a maternity leave.

Her lawsuit alleged that she had been treated poorly, lost job duties and projects and was ostracized as soon as she announced her pregnancy. She contended she was downsized before even taking her maternity leave.

The employer asked the court to transfer the case to arbitration because Daphne had signed an arbitration agreement when she first accepted the job as a condition of being hired.

The court complied. It noted that Daphne was given adequate opportunity to review the policy, including showing it to a lawyer, before signing it.

Plus, the policy provided for a neutral arbitrator, did not limit the remedies or damages an employee could seek, allowed for discovery, required a written decision stating the factual and legal bases for the decision and provided that the employer pay for the arbitrator. That made it a fair agreement, fully enforceable under California law. (Chau v. EMC, et al., No. C-13-04806, ND CA, 2014)

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