Before You Agree To Arbitrate Your Employment Law Claim, Part 2

From our point of view, there is little fairness for employees subject to arbitration agreements. This is the second post in a two-part series – part one covered Getting Educated About The Facts.

It’s All About Fairness

At the outset of arbitration, the process of picking an arbitrator is generally accomplished by agreement between the parties. However, if an arbitrator cannot be agreed upon, one is assigned to the case by the arbitration company that manages the case and has the list of available arbitrators. The employer and defense attorneys who regularly arbitrate employment law cases are well aware of the panel of arbitrators and will choose arbitrators it believes will be favorable to the employer. Since the employee has no information about arbitration or arbitrators and the employee’s attorney generally avoids arbitration, the employee has far less access to a cross-section of arbitration results and information about arbitrator bias, other than word of mouth from other attorneys. For those reasons, the arbitrator selection process can be very daunting for an employee. Furthermore, an arbitrator who wishes to work again as an arbitrator has very little incentive to be fair to an employee in an arbitration. The likelihood of an arbitrator, receiving future work from an aggrieved employee is non-existent. Conversely, an employer with hundreds or thousands of employees will have many future employment disputes/claims and may select the same arbitrator on another case in the future. That issue coupled with the fact that the employer is responsible for paying the arbitrator’s entire bill makes it difficult for an employee’s attorney to recommend arbitration, if the process can be avoided.

Generally, meeting the standard for avoiding enforcement of an arbitration agreement is difficult but not impossible . That is because there are many poorly drafted employment arbitration agreements. Often times, employers seeking an additional edge in arbitration, may insert unfair provisions that can be grounds to void the arbitration agreement. In order to avoid arbitration, the employee must convince the court that the agreement to arbitrate is “unconscionable.” Our firm has been able to avoid arbitration of our clients’ employment claims on multiple occasions by arguing that the arbitration agreement is unconscionable.

Recent Case History

In a recent case, Trivedi v. Curexo Technology Corp., the court ruled that the employer’s arbitration agreement was “unconscionable.” In Trivedi, the Court of Appeals found that the arbitration agreement the at issue was unconscionable due to the fact that it was initially presented to the employee on a “take it or leave it” basis and the employer did not attach a copy of the rules of arbitration to the agreement. Moreover, the court found that the agreement provided the employer advantages over the employee that would not be available in the absence of the arbitration agreement. For one, the agreement lowered the standard for the employer to recover its attorneys fees if it prevailed in the case. Also, the agreement provided an opt out of arbitration that realistically would only be exercised by the employer.

Before You Sign

Prior to signing any arbitration agreement presented to you by your employer or prospective employer, you should question your employer as to whether the arbitration agreement is negotiable or whether such agreement is being presented on a “take it or leave it” basis. If your employer tells you that it is “take it or leave it” you should confirm that in writing. Also, you should request a copy of the rules for arbitration and confirm in writing that you either received or did not receive a copy of the arbitration rules. Moreover, it would be ideal to have an experienced employment lawyer review your arbitration agreement prior to your signing the agreement and provide you with an evaluation of the agreement. You may even request that the employer pay for such independent attorney review under California Labor Code section 2802 which mandates that the employer pay all of an employee’s reasonable expenses related to employment. If you are an employee who has signed an arbitration agreement and you are considering pursuing your employment claim, you can demand a copy of a signed arbitration agreement pursuant to California Labor Code section 432. That labor code section provides that an employer must provide to the employee a copy of all documents signed by the employee that are contained in the employee’s personnel file.

We can help you evaluate whether the arbitration agreement you signed is effective. Alternatively, we can advise you whether it makes sense to ignore the arbitration agreement and instead file a lawsuit in California Superior Court, where you have a legal right to a jury trial. Our firm has offices conveniently located in San Diego, Irvine and San Francisco. Our firm’s partners are all experienced employment lawyers. We can review your employment arbitration agreement and advise you about your legal rights in connection with your employment arbitration agreement.

Read Part One of this article, Get Educated About the Facts.

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