In the latest of a series of recent court decisions on the enforceability of arbitration agreements in California, the Ninth Circuit has ruled that a plaintiff’s separate acknowledgement of agreement to an arbitration clause in an employee handbook is sufficient to enforce that agreement.
In Ashbey v. Archstone Property Management, Inc., Michael Ashbey was employed for Archstone until 2010, when the company terminated his employment. Ashbey filed a Title VII suit for unlawful retaliation. Archstone moved to compel arbitration under s dispute resolution policy outlined in its employee handbook and Ashbey’s written acknowledgement of the arbitration provision, which read as follows:
“I acknowledge that I have received directions as to how I may access the Archstone Company Policy Manual, including the Dispute Resolution Policy. I understand that Archstone can administer, interpret, discontinue, supplement, amend or withdraw any of the employment and personnel policies and procedures set forth in this Company Policy Manual. I understand that it is my responsibility to understand the Archstone Company Policy Manual, including the Dispute Resolution Policy, and to adhere to all of the policies contained herein.”
The district court denied Archstone’s motion to compel arbitration, saying that Ashbey did not knowingly waive his right to a jury trial under Title VII.
On appeal, the Ninth Circuit reversed the lower court’s ruling, saying that it erred in denying Archstone’s motion to compel arbitration. The court said that the acknowledgement Ashbey signed clearly notified him that the employee handbook contained a dispute resolution policy, and that by signing it, he agreed to adhere to the manual and the dispute resolution policy:
“This Policy is governed by the Federal Arbitration Act… this Policy requires all such disputes between Employee and the Company to be resolved only by an arbitrator through final and binding arbitration and not by way of court or jury trial… This Policy also applies, without limitation, to disputes arising out of the employment relationship or the termination thereof including, without limitation, disputes over… harassment and claims arising under the… Civil Rights Act of 1964… and all other state statutory and common law claims.”
The Ninth Circuit said that it was not necessary for the acknowledgement to detail the terms of the dispute resolution policy since the full text of that policy was available to Ashbey in the employee handbook, which he had stated at trial that he knew how to access.
In addition, the court noted that the language of the policy made it clear to anyone reading it that the right to a jury trial was waived in favor of arbitration.
To enforce an arbitration clause in California, employers would be wise to include the arbitration policy in a written acknowledgement receipt as well as have employees sign the arbitration clause itself.
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