Employer Evidence of Custom and Practice of Signing Arbitration Agreement May Not Be Enough to Estab
For many years now, California employers have been trying to force employment disputes into arbitration by requiring new applicants and existing employees to sign arbitration agreements. In an effort to avoid arbitration, employees typically the challenge the arbitration agreements as unconscionable. There are two types of unconscionability – substantive unconscionability and procedural unconscionability. Substantive unconscionability refers to whether the terms of the agreement are unfair. Procedural unconscionability refers to whether the circumstances under which the agreement was signed were unfair.
Evidence of Custom and Practice Not Enough
A recent case, Juen v. Alain Pinel Realtors Inc., may provide another arrow in the quiver for employees to argue against arbitration. While the Juen case was not an employment case, it did have an arbitration component to it. Bradley Juen hired Alain Pinel Realtors to sell his home. Several years later, Juen filed a class action lawsuit that alleged that Pinel and other companies ran a sort of kick back scheme. Pinel moved to compel arbitration pursuant to the listing agreement. In support of the motion to compel arbitration, Pinel only produced a copy of the agreement signed by Juen but not signed by anyone on behalf of Pinel. To substantiate that the agreement was signed by Pinel, Pinel submitted a declaration under penalty of perjury stating that “it was Pinel’s policy, custom, and practice” to allow clients to elect whether to agree to arbitration or not. The declaration further stated that the managing broker for Pinel would agree to arbitration if the client agreed to it. The trial court denied the motion to compel arbitration and Pinel appealed.
On appeal, Pinel argued that the custom and practice of the broker by initiating the agreement was sufficient to establish an agreement. The Court of Appeal disagreed. The custom and practice set forth by Pinel did not establish that the agreement in question was ever signed by Pinel’s manager. In order to establish that Pinel had, in fact, signed the agreement, Pinel needed to establish that it was the habit and custom of the manager to review each agreement for signature and/or that Juen’s agreement was presented to the manager. Because Pinel could not establish that there was mutual assent to arbitrate the Court of Appeal held that it could not be enforced against Juen.
The Juen decision can be found here -
What Does this Mean For You
The issue of arbitration agreements typically only comes up when there is a dispute between the employee and his or her employer. Should such a dispute arise, employers will almost always try to enforce arbitration against the employee. When that happens, employees need to understand that there are circumstances when those arbitration agreements are enforceable and other times when they can be avoided. Attorneys that work in the area of employee rights law can assist in this regard.
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