The court rejected the employer`s request to force arbitration. Normally, a party`s failure to read a contract before signing shows a lack of due diligence. But the court stated that the evidence does not support the lack of due diligence on the part of the employee, because the employee receipt and recognition form did not mention that the manual now contained an arbitration agreement. Among the limited exceptions, the law does not apply to post-conflict agreements, “negotiated compensation agreements” or persons registered with a “self-regulatory organization” within the meaning of the Securities Exchange Act of 1934. If arbitration agreements are included in a staff manual or are distributed in another online manner, employers should consider The following: Shockley v. PrimeLending, 2019 U.S. App. LEXIS 20873 (8th Cir. 15 Jul 2019). There, the Eighth Circuit, which applied Missouri contract law, found, among other things, that even an employee`s recognition of her audit of the arbitration conditions, “offered” in a staff manual, and her retention in employment, without more, would show no intention of accepting the offer. (Of course, the law may vary from country to country, so it will be wise to stay abreast of relevant developments in this regard.) The welcome letter expressly states that the manual “is not intended to be a contract (explicit or implied) or to create other legally enforceable obligations on the part of the company or its employees.” In applying contract law, the Court of Appeal concluded that the language was clear and clear: the welcome letter was not intended to create legally enforceable obligations, including a duty of conciliation.
In addition, the court said, the employer was not required to point out to the worker that a compromise clause had been included in the November 2017 employee manual. California courts have long held that a party is bound by a contract, even if it did not read its contents before signing it. The employee did not dispute the authenticity of his signature on the November 2017 Personnel Manual Confirmation page, although he did not remember signing it. Therefore, the evidence showed that he received the manual, despite his assertions to the contrary. For more information on other recent legal developments related to arbitration and class abandonment, check out our previous blog posts: On October 13, 2019, California Governor Gavin Newsom signed Assembly Bill 51, a law that makes it illegal for a California employer to require candidates or employees to sign an arbitration agreement as an employment condition. Currently, the use of mandatory arbitration agreements and class action waivers is extremely common among California employers, and recent U.S. Supreme Court jurisprudence has strongly supported their applicability. While the bill – which will take effect on January 1, 2020 – is likely to be subject to legal challenge, as this is anticipated by federal laws, AB 51 is a clear indication of California`s intention to eliminate the use of binding arbitration agreements in labour relations, and will require California employers to make some difficult decisions before the law comes into force. Confirmation of the answers to each of these questions could make the difference between the application of an arbitration provision or the fact that the company is faced with a class action or a class action in court. Employers should review their manuals and arbitration agreements to ensure they can withstand attacks like PrimeLending`s. The court distinguished Esparza from other cases where arbitration agreements in staff manuals were enforceable.