Employer is Denied Enforceability of Arbitration Agreement Found in Employee Handbook
In the California Court of Appeals case of Sparks v. Vista Del Mar Child and Family Services, the employee filed a wrongful termination complaint against the company after he complained of various employment practices he believed violated state and federal reporting and compensation laws. The defendant, intendant to compel arbitration based on a provision found in its employee handbook. The court denied enforceability stating that, in general, arbitration agreements in employee handbooks are non-enforceable. This is because they should be signed as a separate document, employee handbooks often state that they are not contracts, that they can be unilaterally changed, etc.
In California and elsewhere, employers are having greater and greater difficulty enforcing arbitration agreements to the point where you have to ask if it is worse than the fight before the fight. What sense does it make to try and compel arbitration if losing costs you $50,000 to do so?
If you have an arbitration agreement, remember to make sure:
- It is signed as a stand-alone document.
- It is specific to coverage rights waived and any process to follow.
- Get it reviewed by a lawyer. It may cost you a few hours of their time, but you are doing it to save many thousands if you do get sued.