HR Management & Compliance

News Notes: Controversy Over Arbitration Rages On

Finding the right language to ensure that arbitration agreements will stand up to legal scrutiny can be tricky. And a new decision by the California Court of Appeal adds to the confusion. When executive William Stirlen sued Northern California-based Supercuts for wrongful discharge, Supercuts tried to enforce an arbitration clause in Stirlen’s employment agreement. But the court ruled the clause was so one-sided that it was unfair and refused to enforce it.5 Under the arbitration agreement, which the court said Stirlen had no realistic opportunity to negotiate, he gave up the right to seek remedies-such as punitive damages-that he could have claimed in court. But Supercuts retained the right to sue Stirlen in court, with no limit on damages. Because this area of law is still unsettled, an employment law expert should review all arbitration agreements