Yesterday, we looked at the first part of a case involving a spa director who was allegedly pushed out of her job following a family leave. Today, the conclusion of the case – plus a new webinar on California family leave that you won’t want to miss.
Cathleen Yonahara of Freeland Cooper & Foreman, LLP in San Francisco explains the case. For the details introduced yesterday, click here.
Arbitration Provision Itself Was Reasonable
The trial court concluded that the arbitration provision was one-sided because it implied that Hicks was required to arbitrate her claims and Hilton, her employer, was not.
The arbitration agreement used the language “I understand” and “I agree,” referring to Hicks, and only Hicks was required to sign the agreement. Further, the only specifically listed examples of claims subject to arbitration were discrimination claims.
But the appeals court found the arbitration agreement provision was mutual because it stated that the agreement to arbitrate applied to “any and all disputes or controversies arising during the period of my employment.” Also, the arbitration provision didn’t exclude claims typically filed against an employer.
The appeals court wasn’t concerned about Hilton’s failure to sign the arbitration provision because in the employment context, unsigned arbitration agreements are enforceable.
The appeals court also disagreed with the trial court’s conclusion that the AAA rules didn’t allow Hicks adequate discovery and unfairly delegated too much authority to the arbitrator. The appeals court stated that AAA discovery was sufficient, and it assumed that the arbitrator would follow the spirit of the rule.
The Rx for intermittent-leave headaches. Webinar January 25th;
Hicks also argued that the arbitration clause was unfair because it didn’t provide for a neutral arbitrator. That argument failed. The AAA rules provide that arbitrators shall have no personal or financial interest in the matter and no relation to the dispute, the parties, or their attorneys that may create an appearance of bias. Further, both parties have an opportunity to strike arbitrators to whom they object.
The appeals court found that the arbitration provision had a high degree of procedural unconscionability [as explained yesterday] but no substantive unconscionability. Thus, the arbitration provision was enforceable. Hicks v. Mission Bay Management (California Court of Appeal, Fourth Appellate District, 11/30/11, unpublished).
Bottom Line
Courts will carefully scrutinize employment arbitration agreements. Many employers give employees arbitration agreements on a take-it-or-leave-it basis, which is procedurally unconscionable.
As this case demonstrates, arbitration agreements that are procedurally unconscionable may still be enforced by the courts if they find no substantive unconscionability.
The minimum substantive fairness requirements include:
- mutuality
- a neutral arbitration
- sufficient discovery
- a written award detailed enough to allow judicial review
- all remedies available in a judicial action
- the employer must pay for all costs unique to arbitration.
You should carefully review your arbitration agreements for compliance with California law.
This Employer May Have Dodged a Litigation Bullet …
… but it’s still facing arbitration with an employee who was quite possibly pushed out of her job due to illegal leave-related retaliation. It’s not a position you want to be in.
Leave-related challenges can be incredibly trying for employers in California – particularly when you have an employee you suspect is trying to work the system.
“I can’t make it in today because I’m having an asthma attack … I have a migraine … I’m experiencing severe morning sickness … I need to drive my ailing mother to the doctor … I have a counseling session.” The list of reasons employees give for why they can’t make it into work goes on and on.
Plus, you’ve got the added hassle of juggling both the federal FMLA rules and the more stringent California CFRA rules. It’s no wonder that intermittent (and reduced schedule) leave presents the biggest compliance-related challenge for many California employers.
Join us on January 25 for an in-depth webinar all about managing tricky intermittent-leave issues in California. You’ll learn:
- How to use your established call-in and attendance policy to thwart abuse, and the questions supervisors should ask employees who call in intermittently
- Medical certification language to accept, and why statements like “intermittent leave needed” don’t cut it
- Questions you should ask to get the information you need to properly designate absences
- How long the original medical certification is good for, and what you’re legally permitted to ask the employee about his or her leave requests during that timeframe
- What you can legally do when the certification says “employee may need one to two days off” but in reality it’s more like four or five days at a time
- When to resort to a second or third medical opinion – and the legal bounds you must stay within when requesting those certifications
- When a retroactive designation of intermittent time off is permitted under California and federal law
- How to accurately account for time off
- When you may legally dock pay for intermittent or reduced schedule leave, and how to ensure that pay reductions don’t destroy exempt workers’ exemptions
- When you may transfer employees who are using leave intermittently
- When a fitness-for-duty exam may be justified
- The specific challenges you may face when employees call in due to substance abuse-related issues
- The impact proposed amendments to the pregnancy disability leave regulations may have on intermittent leaves
In just 90 minutes, you’ll learn how to confidently navigate the complicated world of intermittent leaves, once and for all. Register now for this timely event risk-free. http://ced.blr.com/webinars/p/20120125-leave-management.aspx
Can’t make it on the 25th? Order the CD and learn at your leisure.
Download your free copy of Notice Requirements for CFRA and FMLA: California Labor Laws today!