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California Workplace Rights Blog

Monday, June 30, 2014

Should I Sign an Arbitration Agreement?

These days many employers require their employees to sign an arbitration agreement to get or keep their jobs.  An arbitration agreement is a contract to skip going to court and have a private judge settle any lawsuit the employee brings.  In other words, the employer is forcing the employee to give up his or her constitutional right to a jury trial as a condition of employment.  Unbelievably, this is completely legal! 

But it gets worse.  Once the case goes to arbitration, the employer can stop the employee from ever getting to an arbitration hearing by refusing to pay the arbitrator.  Of course, the employee can try to go back to court, but by then he or she will have wasted a year or two in arbitration and likely won't get a trial date in Superior Court for another year.  

The good news is that some employers are allowing employees to opt-out of arbitration agreements.  Is this because those employers want to support and defend the constitution?  No.  If they wanted to do that they would forget about arbitration all together.  Employers who do this want to strengthen their position to force employees to arbitrate.  And it works.  Recently the US 9th Circuit Court of Appeals, in a case called Johnmohammadi v. Bloomingdale’s, which covers California, forced a Bloomingdale's employee to arbitrate her claims because she had signed an arbitration agreement, which allowed her to opt-out of the agreement if she had wanted to.  If she had chosen to opt-out of the agreement, she would have been able to take her claims to court, and she could have served as a representative for a whole class of employees and help them bring their claims as well.  Instead, she was forced to bring only her claims in private arbitration.

So if your employer gives you the choice to sign an arbitration agreement, just say thanks, but no thanks and keep your right to a jury trial in a court.




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