Can a Job Applicant Refuse to Sign an Arbitration Clause But Still Be Hired?

06/03/2015 // Keller Grover LLP // (press release)

Forced arbitration agreements put job applicants in a no win situation. If they don’t agree, they probably won’t get hired and possibly be unable to financially support themselves and their families. If they do agree, are hired but management breaks the law, filing a lawsuit to protect their rights isn’t an option. Instead, they’re forced into an arbitration hearing where the process may be stacked against them. A bill that passed the California Assembly in May would change this situation.

Assembly Bill 465 would make the process more transparent. It would ensure that if a job applicant or employee signs an arbitration clause, he or she­­­­­­­­ would do so knowingly and voluntarily. Agreeing to such a clause couldn’t be a condition of employment and an applicant couldn’t suffer any negative consequences if he or she refuses to sign it.

Arbitration is an alternate dispute resolution process that essentially is a private trial where the person (who need not be a lawyer) where the decision on who to hear the case is often heavily influenced by the employer. The arbitrator may also be tempted to find in the employer’s favor in order to continue to earn money by deciding cases involving the employer. These cases are nearly impossible to appeal and, depending on the ground rules (usually set by the employer), the losing party (more often than not the employee) may be stuck paying legal fees and costs to the winning party. Most arbitration agreements also prohibit employees from joining class action cases against their employers.

Assemblyman Roger Hernandez (D-West Covina) introduced a bill that would ensure that such waivers be voluntary and given with the employee’s full consent. Assembly Bill 465 passed on an Assembly floor vote in May and it’s now up to the state Senate to act, according to an article on Capital & Main.

There are many employer groups that don’t want employees to be able to protect their rights and are fighting the bill. These groups include the California Chamber of Commerce, the California Association of Realtors, the California Farm Bureau Federation, the California Newspaper Publishers Association and the Western Growers Association.

Here are two examples of how mandatory arbitration clauses harm workers.

·       Yoel Matute worked at a Santa Monica car wash for seven years before suing it in 2012 for wages he believed he was owed. In response, his employer tried to dismiss the case, claiming Matute signed an arbitration agreement. Matute, from Honduras, said he didn’t know what he signed when he applied for the job. He was given a number of papers to sign in English (he can read virtually no English) and Spanish (which he can read very little) with very little time to go over them. Matute says he needed to sign them to get a job and support his family. The court found the clause unenforceable because of the insufficient time to review it and portions were not in Spanish. Matute still hasn’t been paid the wages he says he’s owed.

·       Rajan Nanavati testified before the Assembly’s Labor and Employment Committee in May. He was hired as a dispatcher for Google Express through Adecco, a staffing agency. He complained to Adecco he was forced to work nine to 13 hours without meal breaks and was fired. He tried to file a class action lawsuit, but the agency successfully argued to the judge in his case it should be dismissed because Nanavati and other employees had signed arbitration agreements preventing them from bringing individual or class action lawsuits against Adecco.

Though we hope this bill will become law in the future, workers will need to protect their rights as best they can now. If your employer has violated your rights you need the help of an experienced employment attorney. Contact our office whether there’s an arbitration agreement in place or not, so we can discuss your situation, the applicable laws and the best way to protect your rights and interests.

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