A recent decision by the California court of appeal in Velarde v. Monroe Operations, LLC set forth the importance for employers to present arbitration agreements to employees in a fair and non-coercive manner.  Although employers can require that employees sign an arbitration agreement as a condition of employment or condition of continuing employment, the manner in which the arbitration agreement is presented to employees is critical to being able to enforce the arbitration agreement once it’s been signed.  Specifically, the Velarde court found on a motion to compel arbitration filed by the employer that the arbitration agreement was procedurally unconscionable, and therefore not enforceable, because it was presented as an adhesive contract buried among 31 documents that the employee had to sign quickly while an HR manager waited. Additionally, the employer’s HR manager made false representations about the nature and terms of the agreement, which contradicted the written terms, rendering the agreement also substantively unconscionable.

The Velarde decision re-affirms the importance for employers to issue arbitration agreements in a non-coercive and fair manner.  This includes that it is not presented in a stack of other onboarding documents. For example, it is common for employers to onboard employees via a DocuSign process where employees click through documents on their computer to sign.  Employers should not present arbitration agreements in this fashion. Additionally, employers should not rush employees to sign the arbitration agreement and must provide the employee an opportunity to raise any questions or concerns about the arbitration agreement.

If you have any questions regarding implementing arbitration agreements in the workplace or how to present an arbitration agreement, contact our employment attorney Scott Liner at [email protected].

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_{Please note that this article is for informational purposes only and should not be considered legal advice and does constitute an attorney-client relationship. It is recommended to consult with an attorney directly for specific guidance pertaining to your business and its practices.}