If you use an arbitration agreement or have any other contract-based arrangements with employees, make sure the company keeps all records showing when and how the agreement was presented or signed. You may need that information many years later.
Here’s why: Employees may try to challenge the agreement by showing they didn’t voluntarily agree to the terms or didn’t understand the ramifications. You’ll then have to come up with convincing proof to the contrary.
Recent case: Kenneth Moore worked for Ferrellgas for 14 years until he was fired. When he originally took the job, he signed an arbitration agreement.
Moore sued, alleging the company fired him due to age discrimination and disparate treatment that violated either Michigan common law or the Elliott-Larsen Civil Rights Act. But first he had to try to have the arbitration agreement invalidated.
Luckily, the employer could show that Moore voluntarily accepted the contract as a condition of employment, and that Moore was a high school graduate who held responsible positions. Therefore, the court concluded, he knew what he was getting into and couldn’t start over more than a decade later. (Moore v. Ferrellgas, No. 1:07-CV-997, WD MI, 2008)
Final note: Discuss arbitration agreements—both the pros and the cons—with your attorney.
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