Understanding Your Rights: Arbitration Agreements in California Employment

In California, many employers require employees to sign arbitration agreements as a condition of employment. These agreements often waive an employee’s right to bring disputes to court, requiring them instead to resolve workplace issues through private arbitration. While arbitration can sometimes be faster and less expensive than litigation, it can also limit an employee’s legal rights and remedies. If you’re facing an arbitration agreement at work, it’s important to understand your rights under California law.

Can My Employer Require Me to Sign an Arbitration Agreement?

Under California law, employers can ask employees to sign arbitration agreements, but they cannot force employees to sign them as a condition of employment. In other words, refusing to sign an arbitration agreement should not result in termination or denial of a job offer. This protection comes from California Assembly Bill 51 (AB 51), which prohibits employers from making arbitration agreements a mandatory condition of employment.

What Are My Rights If I’m Asked to Sign an Arbitration Agreement?

If your employer presents you with an arbitration agreement, here are some key points to consider:

• Voluntariness: You have the right to decline the agreement without facing retaliation or losing your job.

• Unconscionability: Courts may refuse to enforce an arbitration agreement if it is unfairly one-sided or imposes excessive burdens on employees.

• Right to Review: You should take time to carefully review the agreement and, if necessary, consult an attorney before signing.

• Opt-Out Clauses: Some arbitration agreements include opt-out provisions, allowing employees to reject arbitration while keeping their job.

Are Arbitration Agreements Enforceable?

While many arbitration agreements are enforceable, courts may strike down agreements that are overly restrictive or violate public policy. For example, arbitration agreements that:

• Prevent employees from pursuing claims under California’s Fair Employment and Housing Act (FEHA) or California Labor Code may be deemed unenforceable.

• Contain terms that disproportionately favor the employer, such as requiring employees to pay excessive arbitration fees, may be considered unconscionable.

• Lack clear, knowing, and voluntary consent from the employee may be challenged in court.

What Happens If I Have Already Signed an Arbitration Agreement?

If you’ve signed an arbitration agreement, you may still have options:

• Challenge the Agreement: If the agreement is unfair or violates California law, you may be able to challenge its enforceability.

• Negotiate with Your Employer: Some employers are willing to modify arbitration agreements upon request.

• Seek Legal Advice: Consulting with an employment attorney can help you understand your rights and explore potential challenges to the agreement.

Recent Legal Developments

California courts and federal law continue to shape arbitration policies. While AB 51 aims to restrict forced arbitration agreements, parts of the law have faced legal challenges. Employees should stay informed about changes in California labor laws that may impact their rights regarding arbitration agreements.

Final Thoughts

Arbitration agreements can significantly impact your ability to seek justice in the workplace. If you’re unsure whether signing an arbitration agreement is in your best interest, consider seeking legal advice before making a decision. Employers cannot force you to sign, and if you feel pressured or misled, you have legal protections under California law.

If you have questions about arbitration agreements or other employment law concerns, contact Shiraz Simonian for a free consultation.

818-405-0080 ext. 101

shiraz@simonianlawfirm.com