Unsigned Agreements to Arbitrate Employment Disputes May Be Enforceable

The Court of Appeal for this district recently held that an employee is obliged to arbitrate any disputes with the employer once the employer declares that continued employment manifests assent to such a requirement, even if the employee declines to sign an arbitration agreement.

Policy Announcement

An employee brought her action against her employer on December 22, 2016. Twenty days earlier, the employer had announced its policy requiring arbitration of disputes.

The day after the employee sued, she and her lawyer presented a letter to the employer indicating that she would not sign the arbitration agreement.

Implied Consent

The Court of Appeal nevertheless held that “California law in this area is settled: when an employee continues his or her employment after notification that an agreement to arbitration is a condition of continued employment, that employee has impliedly consented to the arbitration agreement.”

The reasoning behind the Court’s holding is that the employee maintained her employment status between December 2 and December 23, and remained an employee at the time of the hearing in her case. As a result, she was already bound by the arbitration agreement before the presentation of the letter indicating both her rejection of the agreement and her intent to remain employed. Further, the Court explained that because the employment relationship was at-will, the employer could unilaterally change the terms of the employee’s employment, as long as it provided notice of the change.”

The case is Diaz v. Sohnen Enterprises, 2019 S.O.S. 1722.