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Get separate signature to enforce arbitration agreements

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in Discrimination and Harassment,Employment Law,Human Resources

When Lupe Romo filed suit after being fired, her employer argued that she had to take her complaint to arbitration. Reason: An agreement to arbitrate was part of the employee handbook, and Romo had signed the section acknowledging that she had read and understood the handbook and agreed to abide by all of its rules.

The catch: Neither she nor her employer had signed a separate line in the handbook that followed the section on arbitration agreements.

A state appeals court decided the handbook included two separate agreements: one to arbitrate claims and one to be bound by the rest of the handbook. And since Romo never signed the arbitration section, she wasn't bound to take her case to arbitration. (Romo v. Y-3 Holdings Inc., No. B136617, Cal. CA, 2001)

Advice: Never try to stuff an arbitration policy into the fine print of your handbook, it won't stand up in court. (YATL, May 2001, p. 6) Always have a separate form that must be signed by the employee.

Still, writing the agreement can be tricky. Most handbooks, to establish employment-at-will, include language stating that the handbook is not a contract. Therefore, you would have to make a specific exception for the arbitration agreement.

Also, a general agreement to arbitrate "any controversy or claim" usually would not be enough to provide an employee with fair notice of the rights he or she is waiving. Reason: Laws like the Age Discrimination in Employment Act require that you follow strict guidelines in writing waivers. (YATL, November 1999, p. 6)

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