As discussed by Jared Slater, of Ervin Cohen & Jessup, in this article available at JD Supra, the California Court of Appeal rendered unenforceable an arbitration agreement that a new employee was required to sign as one of 31 documents presented to her by a human resources manager at the outset of her first day of work. The court in Velarde v. Monroe Operations, LLC found this process to be procedurally unconscionable.
As Attorney Slater explains, “[t]he Court of Appeal made clear that the arbitration agreement was unenforceable due to the coercive nature of the circumstances: ‘Had [the employer] either correctly explained the terms of the agreement, or had not explained them at all, and had given [the employee] a reasonable opportunity to review the agreement and to consult counsel, “this would be a different case.”‘”
The takeaway for counsel advising HR departments: make sure your clients understand the importance of providing new employees the opportunity to review arbitration (and other) agreements and to seek attorney input.
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