- Clarifying Armendariz: Appellate Court Evaluates Employment Arbitration Agreements
- January 19, 2010
- Law Firm: Haight Brown & Bonesteel, LLP - Los Angeles Office
Ten years ago, the California Supreme Court established criteria for court enforcement of employment arbitration agreements in Armendariz v. Foundation Health Psychcare Services, Inc., 24 Cal.4th 83 (2000). However, litigation has persisted as parties continue to challenge employment arbitration with varying results. As a result, employers have been concerned about the enforceability of their employment arbitration agreements.
The most recent appellate case addressing this issue is Roman v. Superior Court, 172 Cal. App. 4th 1462 (2009). This decision provides some clarification to employers as to what to expect when an arbitration agreement is reviewed by a court. Upon reviewing the Armendariz factors, the trial court granted the Petition to Compel Arbitration despite the fact that there had already been discovery and other pleadings filed in the case and the Court of Appeal concurred.
The Roman case has created good news for employers attempting to draft enforceable arbitration agreements. Arbitration agreements prepared by employers are likely to be upheld if challenged in court as long as they provide for: 1) a neutral arbitrator, 2) the same remedies available in the arbitration as in the court system, 3) “adequate discovery”, 4) employer-paid arbitrator costs, 5) a written arbitrator decision, and 6) mutual agreement to submit all claims to arbitration without reservation by either party.