Arbitration Agreements & Employment

When it comes to employment law, arbitration agreements refer to agreements between employers and employees that prohibit harmed employees from filing lawsuits against their employer for violations of their legal rights. Instead, these agreements require that employees to resolve their grievance through arbitration.

Employers love arbitration, as it takes their misconduct out of public viewing and prevents a judge or jury from awarding maximum damages against them. This is why employers have historically tried to make arbitration agreements a mandatory condition of employment. In other words, in order for an employee to work, they must sign away their right to file a lawsuit.

If you live in California, you are fortunate. Because of imbalance of power between employers and employees, this state takes a skeptical view of arbitration. In fact, the California Courts have established rules that govern whether a mandatory arbitration agreement is enforceable.

First, an arbitration agreement must be clear. In Flores v. Nature’s Best, the Fourth District Court of Appeals determined that an arbitration agreement that was ambiguous as to exactly what legal claims were covered by the agreement, as well as what arbitration procedures were to be followed. In other words, if you are subject to an agreement that does not specify what legal rights must be arbitrated, or the governing rules of arbitration, then courts do not have to uphold your agreement.

And in a landmark case, Amendariz v. Foundation Health Psychcare Services Inc, the California Supreme Court established a set of requirements that an arbitration agreement must contain. This includes:

• A neutral arbitrator. Because of the imbalance of power between employer and employee, employees must receive a fair shot of relief. In other words, employers cannot choose someone biased to arbitrate a dispute. Instead, it must be a neutral, third-party arbitrator.
• The employee must be allowed to obtain discovery. This is evidence, depositions, and information that the employer would have a right to in a legal proceeding. This information is critical for an employee to stand a chance to prove his or her case.
• The agreement cannot limit an employee’s legal rights to relief. Employees have many legal rights, and employers can be held liable for damages if they violate those rights. An arbitration agreement cannot restrict or decrease the damages an employee is entitled to under the law.
• If an employee prevails, he or she must have a right to recover certain arbitration expenses and fees. Failure to do so would encourage employers to run out the clock by prolonging proceedings until an employee has run out of money. Further, it would not be worth it to arbitrate if the arbitration costs exceed the damages an employee can possibly recover.

Call Moss Bollinger

If you have been harmed by the acts or omissions of your employer and you were made to sign an arbitration agreement, call me. Employers have a great amount of influence and control over new employees and have been known to try to get away with unlawful agreements. Let me help you shift the balance in your favor. Contact Moss Bollinger, a law firm that has years of experience standing up to employers on behalf of employees. We work on a contingency basis and only get paid if you do. Call Moss Bollinger today at (310) 982-2291 to schedule a free consultation or contact us online.