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EMPLOYEE DISPUTE ARBITRATION AGREEMENTS NOT ALWAYS BINDING
The California Court of Appeal recently decided an employee dispute arbitration agreement used by a large California grocery chain is unenforceable - in certain circumstances.
In Metters v. Ralphs Grocery Co., employee Samuel Metters filed an in-house complaint alleging racial discrimination and harassment with his employer Ralphs.
In response to his complaint, Ralphs sent Mr. Metters the company’s dispute resolution form and arbitration policy - together with a letter asking that he complete, sign and return the form to Ralphs to aid in the investigation.
The letter also stated that if Mr. Metters did not return the executed form within 15 days, Ralphs would (still) investigate the dispute - using the information on-hand.
After some delay, and an additional reminder from Ralphs, Mr. Metters signed and returned the form to Ralphs.
Ralphs’ arbitration policy called for mandatory and binding arbitration of all disputes if not informally resolved. This policy was incorporated by reference into the dispute form - which was entitled “Notice of Dispute & Request for Resolution.” The Court of Appeal noted the form was in part an arbitration agreement, and included conditions above the signature block where the employee was to sign - which stated that by submitting the dispute form, the employee agreed to comply with Ralphs’ arbitration policy. It also included separate, express language consenting to binding arbitration, as well as a statement that essentially stated the employee was not required to complete, sign or return the form for the investigation to move forward.
In finding the agreement unenforceable, the Court of Appeal determined that Mr. Metters was not aware he was agreeing to mandatory arbitration and therefore could not be bound by the form. In reaching its decision, the Court noted that the form did not look like a "contract," its title did not alert the employee to the nature of the document, the language contained in the form did not clearly warn Mr. Metters that special attention should be paid to the provisions relating to arbitration, and the Human Resources Department had not advised Mr. Metters that he would be agreeing to mandatory arbitration if he signed the form.
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Related Attorney(s):
Todd R. Howell
Related Practice Area(s):
Employment and Labor Law
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LOS ANGELES ORANGE COUNTY VENTURA/OXNARD CENTRAL COAST
BAY AREA SACRAMENTO LAS VEGAS RENO PHOENIX
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