Rereading my employee manual company handbook thingie last night I came upon a section that discussed legal matters, and it said that by working and continuing to work at my company I agree to solve matters exclusively through arbitration and not go to civil court over anything.
Is that binding? Can I really waive my right to the judicial system itself in order to secure employment? A passage here makes me think otherwise: “only the arbitrator, and not a judge nor a jury, will decide the dispute.” I understand one can waive the right to a jury during any particular proceeding, but in general as a condition of employment? —That doesn’t seem possible to me.
Please understand I have no problem with arbitration, it should be the first route taken if feasible, and I fully believe any lawyer would recognize fair arbitration if it stared her down, rightly removing strain from the civil court system. This is not meant to say my company is treating me unfairly or anything of the sort. I am not being cynical about anyone’s intentions. It is really a question of whether the company is using this to avoid civil court because people will begin the arbitration process thinking they have no other choice, or whether they can really force my hand like this as a condition of employment. OK, maybe a little cynical about intentions. (I do like the company I work for, though.)
But it seems, intuitively, that that can’t be a binding contract. Is it? (Wouldn’t be the first time my intuition was way off!)
Section 2 of the Federal Arbitration Act says:
Am I reading this as, “Valid as any other contract,” or, “Valid as any other contract given a dispute realized at the time of agreeing to arbitration?”
In general, yes, you can give up your right to go to court as a condition of employment. Agreements to arbitrate are (again in general) as enforceable as other contracts. Personally, I think this shouldn’t be the case – because companies often select arbitration procedures that favor them over their employees – but that’s the law.
Note that many states have their own laws on arbitration. However, many such provisions have been held to be pre-empted by the federal arbitration statute, which is very pro-arbitration.
The short answer is that they can in fact force you to agree to arbitration. Virtually all Collective Bargaining Agreements contain an arbitration clause, BTW. The real question for you, is the one you ask elsewhere:
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But it seems, intuitively, that that can’t be a binding contract. Is it? (Wouldn’t be the first time my intuition was way off!)
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You haven’t provided nearly enough information here. What state are you in, for starters? Did you sign anything during the employment process? Did your employer require you to sign off for the employee handbook? Are there disclaimers in the handbook saying that it is not a contract? (Many handbook include such language.)
This seems to bolster the idea that it only applies to agreements signed after the realization of a dispute, not prior to it. This isn’t just my intuition being off now, it is the normal reading of English that is off if one can submit to arbitration in general, prior to any dispute.
I’m not sure if your employment would fall under the section cited (as it appears to relate to commercial transactions and not employment contracts), but if it did, wouldn’t the part relating to “a provision in a written contract to submit to arbitration any controversy thereafter arising between the parties” be in accordance with your contract?
Yes. You definitely can agree to arbitrate disputes before they arise. Here is the language in your state statute.
And here it is in the Federal Arbitration Act.
The idea is that as long as you are entering into a contract, you can specify the way that disputes get resolved. That’s always been an accepted idea in the law. The more controversial part, is that in the employment context, statutory and constitutional claims can also be included in an arbitration clause.
The Federal Arbitration Act has been interpretted by the United States Supreme Court to cover employment disputes. Moreover, the title of a statute is generally held not to limit the statute’s application. Castillo v. United States, 530 U. S. 120, 125 (2000)
The text of the statute pretty clearly covers employment contracts.
How does one challenge the constitutionality of something by going to arbitration? Suppose I refuse to pay the evil union a piece of my salary – if there’s an arbitration agreement, then they can only drag me to arbitration, which interprets existing law rather than their constitutionality. Or is that not the case? How about once I’m fired because the evil union tells the company that they must fire me because I didn’t give them my money? Again, if I can only go to arbitration, I can’t challenge the legitimacy of the law that caused me to get fired, right?
“…it said that by working and continuing to work at my company…”
With wording like this, if you wanted to go to court over something, couldn’t you just quit?
If you quit you wouldn’t be continuing to work at the company and therefore not be restricted to arbitration. Of course IANAL.
First, you don’t have an employment agreement with your union. One argument made by employers who are trying to avoid unions is that a union can force you to attend meetings and fine you if you don’t attend. Clever employers will show court judgments against employees enforcing fines. So in your example, you could argue constitutional points in court.
Third, under some circumstances you might be able to litigate constitutional claims despite an arbitration clause. Here is a case for those who must know.
No, you’re misunderstanding the point. The “continuing employment” comment was addressed to the need for the required consideration to form a contract. Generally, contracts have to have consideration flowing from each party to the other party. In most states, continued employment is held to be sufficient consideration to the employee for a new job requirement or term.
Once there’s adequate consideration, you can’t undo that by quitting. Your contractual obligations still exist. (Similarly, if the consideration was $50 instead, you couldn’t avoid the contract term by saying that you spent the $50.)
Usual Disclaimer. Although IAAL, I;m not your lawyer and you aren’t my client. I’m probably not even licensed in your state. This is general information and not reliable legal advice. See a lawyer licensed in your state for that.
Odd coincidence: An hour ago, I came across the Illinois case of Melena v. Anheuser-Busch, 816 N.E. 2d 826 (5th Dist. 2004), in which the Illinois Appellate Court struck down a mandatory arbitration clause that the defendant had required plaintiff (an existing employee at the time) to sign. It held that, under the circumstances, the employee’s waiver of its right to have her claims litigated in court was not knowing or voluntary. I was somewhat surprised by this decision.
I have not done further research, but I would not be surprised if this court’s opinion is overturned when and if the issue reaches the Illinois Supreme Court.