Arbitration – BakerLLP

Employers often try to limit employee’s abilities to sue them in court by requiring that employment disputes be resolved through arbitration. Arbitration is a less expensive and less formal method of dispute resolution than the courts. However, arbitration often favors the interests of the employer more than the employee. Because employees do not always benefit as much as employers in arbitration California courts are reluctant to uphold agreements to arbitrate where the employee is only put on notice via an employee handbook. For example, the California Court of Appeals recently held that a policy handbook generally cannot create a binding agreement to arbitrate all employment disputes.

In Sparks v. Vista Del Mar Child and Family Services an employee, Perry Sparks, was hired as a controller, but was fired. Mr. Sparks claims that the reasons he was given for the termination were actually not true, they were merely pretextual. Mr. Sparks alleged that he was really fired because he had filed a complaint against the company for a violation of wage and hour law. Mr. Sparks filed a lawsuit for wrongful termination, unfair business practices, and intentional infliction of emotional distress.

The employer then tried to pause the claims in the court and have them moved to arbitration on the basis that Mr. Sparks had agreed to arbitrate all disputes against the employer. The employer argued that Mr. Sparks had acknowledged that he received the arbitration clause by signing a statement acknowledging that he received an employer handbook that contained the arbitration agreement.

The court disagreed with the employer. First, the court pointed out that the handbook contained a statement that the handbook was not meant to be a contract, so the arbitration agreement within it could not be binding according to the will of the employer. Further, even if the employer had intended the arbitration clause to be binding, the court held that the agreement could not hold up in court because it would take away an employees rights under federal and state law, which is not allowable without providing extra consideration such the right to demand documents from the employer in arbitration.

This case is very helpful for employees because it sets a very high standard as to when an employer can force its employees to arbitrate rather than sue in court. Employees generally lack the ability to bargain with employers to protect their rights any more than the law allows, so employers exploit this by trying to get the employee to voluntarily give up as many rights as they can. Employers think they can get away with this because there will always be someone willing to waive their rights in order to get a job. This case means that employers may not take away an employee’s right to discovery in a wage or discrimination dispute.

Employers May Not Fire Employees Who Assert Their Rights

California employers are not allowed to take any negative action against an employee who has asserted their rights to receive unpaid wages or unpaid overtime. If you have been denied wages or have been fired or demoted for making a complaint against your employer contact the experienced California employment law attorneys of Baker Law Group, LLP. Call us today for a free consultation.