Arbitration Agreements Are Generally Enforceable
An issue that sometimes comes up at work is an arbitration agreement. What happens when an employer requires employees to sign an arbitration agreement? In general, if an arbitration agreement meets certain legal requirements, employers can require them and they can be enforceable. In those cases, any claim that comes up needs to go through the arbitration process instead of court. However, there are certain limitations.
Arbitration Agreements Are Not Enforceable When They Require Certain Waiver of Rights
In the recent case of Carlos Juarez v. Wash Depot Holdings, Inc., the California Court of Appeal concluded that when an employment agreement requires employees to waive their rights to bring a representative action under the Private Attorney General Act (“PAGA”), it is against the public policy of California and is not enforceable.
Being Able to Opt Out
Even if the agreement gives the employee the opportunity to opt out, it doesn’t necessarily make the agreement enforceable. In the Juarez case, the Court of Appeal concluded that simply allowing the employee to opt out without more evidence of the employee’s knowledge and understanding of what he was giving up is not enough to make the rest of the agreement enforceable. To read the court’s full opinion, click here: http://www.courts.ca.gov/opinions/documents/B282667.PDF
If you are not sure about signing an arbitration agreement or if you’ve signed one and aren’t sure about your rights, speaking to an experienced employment law attorney can help.