Your time has finally come. Today is the day you walk into your new place of employment to read over and sign every form necessary for you to begin work. It has been a long, tedious process and now you are starting your current position as the Director of Sales at this prestigious company you once dreamed of working at. It has everything you ever wanted in a company; amazing work culture centered on diversity and inclusion, great work/life balance so that you can still workout after your shift, the opportunity for growth as you climb the corporate ladder, and close-knit working relationships with your peers that foster support, respect, and encouragement. Ultimately, this company is perfect for you.
There’s a stack of documents laid out before you that you must sign and date. You begin to read through each document as you enjoy your freshly made cup of coffee. You notice an arbitration agreement form that requires your signature. Puzzled, you frantically search for your smartphone to research what this is. You discover that an arbitration agreement is a legally binding contract that offers an alternative means of solving a dispute if one should arise. Usually, this type of agreement is between two or more parties; this can include individuals, businesses, or corporations.
With an arbitration agreement, both parties elect to eliminate civil court litigation amidst any problem or issue that may come about. Whether you decide to sign or forfeit that option, this arbitration agreement can make all the difference between working your dream job and unemployment. Typically, both parties must mutually agree to use arbitration to settle disputes before creating an official relationship, regardless if it is for your business or someone else’s. By utilizing arbitration, you opt for a third party to investigate case facts instead of using a judge at trial. The unbiased third party is referred to as the arbitrator.
Before we continue on with arbitration, let’s briefly discuss civil court litigation and what dismissing this option could mean for you as a potential employee of an employer that requires you to sign an arbitration form. In the most general terms, civil lawsuit is a court-based process that allows Person X to pursue Person Y for damages in the instance where there was harm or a wrongful act committed. If person X is successful, then he or she will be awarded compensation for the harm caused by Person Y’s action or lack thereof. Usually, in civil court cases, a skilled litigation attorney is involved. Dismissing civil court litigation could result in objectivity and decision-making based on speculation, limitations on legal remedies, lack of transparency concerning the arbitration process, less opportunity to appeal the decision, and rising costs of arbitration. Essentially, companies are asking employers to give up their right to sue and by agreeing, employees are completely fine with it.
Now more than ever, companies are asking employees to sign an arbitration agreement. The Economic Policy Institute published key findings of a report that illustrated the increasing number of employers that require arbitration agreements. The record declares that more than half—53.9 percent—of nonunion private-sector employers have mandatory arbitration procedures and among companies with 1,000 or more employees, 65.1 percent have mandatory arbitration procedures. The discovery also mentions that 56.2 percent of private-sector nonunion employees are subject to mandatory employment arbitration procedures. The overall synopsis of this observation is alarming as the study uncovers how 60.1 million American workers no longer have access to the courts in order to protect their employment rights.
However, there is light at the end of the tunnel for workers in California. In compliance with AB 51 which was implemented in section 432.6 of the California Labor Code, employers are prohibited from requiring applicants and employees to waive any right or procedure of the Fair Employment and Housing Act (FEHA) or the Labor Code as a condition of employment or continuance of employment, or recipient of any employment-related benefits. In simpler terms, employers can choose to present an arbitration form but any agreement to the offer must be voluntary and not coerced or forced.
It is vital to note that many employees are not entirely sure of what they are being asked to sign.
Therefore, both employer and employee will benefit from understanding their roles related to arbitration agreements and employment without any additional pressure. Circling back to the question at hand, “Can I be fired for not signing an arbitration agreement?” Unfortunately, you can be. Arbitration aside, the fact of the matter is that any employee that is considered at-will can be fired for any reason without warning. In turn, any employee that is considered at-will can also quit for any reason without warning. Please keep in mind that other conditions apply if you are an employee under contract in which the contract states when, how, and why you can be discharged. In this case, the initially agreed upon contract stands. However, if you are a citizen of California that has not signed an arbitration agreement although it was presented, you are able to keep your position because of the new statute.
When it comes to employment law, some cases are more complex than others. In any given situation where you are not sure, it is imperative to seek legal counsel from a trusted and knowledgeable employment law attorney.