The Court of Appeal of California has ruled that an arbitration
agreement hidden deep in the recesses of an employee handbook can’t be
enforced. The provision didn’t stand out, didn’t require a signature
and could be changed by the employer at any time. The court said that
rendered it unconscionable.
Recent case: Perry went to work for the Vista Del Mar Child
and Family Services. He received a thick employee handbook that clearly
stated that it was not a contract. Perry was fired after he tried to
report what he believed were violations of state and federal laws.
He sued and the agency asked the court to move the case to
arbitration. Perry urged the court to keep the case and claimed the
agreement to arbitrate was unconscionable.
He pointed out that the clause was buried in the handbook and wasn’t
even set out with bold type or a different font size. Language in the
handbook stated it was not an employment contract and that the employer
could change anything it wanted at any time without notice. Although
Perry did sign an acknowledgment on the last page of the handbook that
said he had received it, there was no separate signature line following
the arbitration clause.
The court agreed with Perry that the arbitration clause wasn’t valid. (Sparks v. Vista Del Mar Child and Family Agency, No. B234988, Court of Appeal of California, 2nd Appellate District, 2012)
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