California Employers: Four Things to Consider When Providing an Employee with an Arbitration Agreement for Review and Signature

By: Lewis Brisbois' Labor & Employment Team

Despite a California employer having an arbitration agreement that satisfies all the requisite factors set forth by the state’s Supreme Court in Armendariz v. Foundation Health Psychcare Services, Inc., 24 Cal. 4th 83 (2000), often times an employee will attempt to challenge the method in which the arbitration agreement was presented to them in order to invalidate the agreement and ensure the case remains in court. Below are some tips for employers in the Golden State to consider when presenting an employee with an arbitration agreement for review and signature.

1. Stand-Alone Document: an employer should not bury an arbitration agreement within its employee handbook. Rather, the arbitration agreement should be presented to an employee as a stand-alone document with a separate title and heading for each section.

2. Language Barrier: determine whether the employee has a language barrier that would prevent them from understanding the contents of the arbitration agreement. If there is any doubt as to their ability to read or speak English, an employer should offer the employee an opportunity to review a translated copy of the arbitration agreement. If such an offer is made, it should be notated whether the employee accepted or rejected said offer.

3. Adequate Time to Review: provide the employee with adequate time to review the arbitration agreement prior to signing it. Do not impose any time limitations on the employee (i.e., do not state all documents must be returned within a few hours of receipt).

4. Ability to Ask Questions or Consult with Counsel: provide the employee with the opportunity to ask questions or consult with counsel prior to signing the arbitration agreement.

The above is not an exhaustive list, but these tips can certainly bolster an employer’s argument that a case should be compelled to arbitration.

For more information on this topic, contact the author of this post or visit our Labor & Employment Practice page to find an attorney in your area. You can also subscribe to this blog to receive email alerts when new posts go up.

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