Can I require employees to sign arbitration agreements in Arizona? What are the requirements?

Yes, you can require employees to sign arbitration agreements in Arizona. The requirements for arbitration agreements in Arizona are outlined in AZRS 12-1501, AZRS 12-3004, AZRS 12-3007, AZRS 12-3009, AZRS 12-3014, and AZAC Title 14, Chapter 2, Article 15, Section 5, R14-2-1505.

Validity of Arbitration Agreement

According to AZRS 12-1501, a written agreement to submit any existing controversy to arbitration or a provision in a written contract to submit to arbitration any controversy thereafter arising between the parties is valid, enforceable, and irrevocable, save upon such grounds as exist at law or in equity for the revocation of any contract.

Effect of Agreement to Arbitrate; Nonwaivable Provisions

AZRS 12-3004 states that a party to an agreement to arbitrate or to an arbitration proceeding may waive, or the parties may vary the effect of, the requirements of this chapter to the extent permitted by law. However, before a controversy arises that is subject to an agreement to arbitrate, a party to the agreement may not waive or agree to vary the effect of certain requirements prescribed in AZRS 12-2101.01, AZRS 12-3005, subsection A, AZRS 12-3006, subsection A, AZRS 12-3008, AZRS 12-3017, subsection A or B, or AZRS 12-3026. Additionally, a party may not agree to unreasonably restrict the right under AZRS 12-3009 to notice of the initiation of an arbitration proceeding, or the right under AZRS 12-3012 to disclosure of any facts by a neutral arbitrator. Furthermore, a party may not waive the right under AZRS 12-3016 of a party to an agreement to arbitrate to be represented by a lawyer at any proceeding or hearing under this chapter, except for an employer and a labor organization who may waive the right to representation by a lawyer in a labor arbitration.

Motion to Compel or Stay Arbitration

AZRS 12-3007 provides that on motion of a person showing an agreement to arbitrate and alleging another person’s refusal to arbitrate pursuant to the agreement, the court shall order the parties to arbitrate. If the refusing party opposes the motion, the court shall proceed summarily to decide the issue and order the parties to arbitrate unless it finds that there is no enforceable agreement to arbitrate. If a proceeding involving a claim referable to arbitration under an alleged agreement to arbitrate is pending in court, a motion under this section must be made in that court. Otherwise, a motion under this section may be made in any court as provided in AZRS 12-3027. If a party makes a motion to the court to order arbitration, the court on just terms shall stay any judicial proceeding that involves a claim alleged to be subject to the arbitration until the court renders a final decision under this section. If the court orders arbitration, the court on just terms shall stay any judicial proceeding that involves a claim subject to the arbitration. If a claim subject to the arbitration is severable, the court may limit the stay to that claim.

Initiation of Arbitration; Notice

According to AZRS 12-3009, a person initiates an arbitration proceeding by giving notice in a record to the other parties to the agreement to arbitrate in the agreed manner between the parties or, in the absence of an agreement, by certified mail, return receipt requested and obtained, or by service as authorized for the commencement of a civil action. The notice must describe the nature of the controversy and the remedy sought. Unless a person objects for lack or insufficiency of notice under AZRS 12-3015, subsection C not later than the beginning of the arbitration hearing, the person by appearing at the hearing waives any objection to lack or insufficiency of notice.

Proceedings to Compel or Stay Arbitration

AZRS 12-1502 states that on application of a party showing an agreement described in AZRS 12-1501, and the opposing party’s refusal to arbitrate, the court shall order the parties to proceed with arbitration. However, if the opposing party denies the existence of the agreement to arbitrate, the court shall proceed summarily to the determination of the issue so raised and shall order arbitration if found for the moving party. Otherwise, the application shall be denied. On application, the court may stay an arbitration proceeding commenced or threatened on a showing that there is no agreement to arbitrate. Such an issue, when in substantial and bona fide dispute, shall be forthwith and summarily tried, and the stay ordered if found for the moving party. If found for the opposing party, the court shall order the parties to proceed to arbitration. If an issue referable to arbitration under the alleged agreement is involved in an action or proceeding pending in a court having jurisdiction to hear applications under AZRS 12-1502, the application shall be made therein. Otherwise, the application may be made in any court of competent jurisdiction. Any action or proceeding involving an issue subject to arbitration shall be stayed if an order for arbitration or an application therefor has been made under this section or, if the issue is severable, the stay may be with respect thereto only. When the application is made in such action or proceeding, the order for arbitration shall include such stay.

Arbitration Process

According to AZAC Title 14, Chapter 2, Article 15, Section 5, R14-2-1505, the arbitrator has the authority to conduct the arbitration in a fair and expeditious manner, including holding conferences with the parties to the arbitration proceeding before the hearing and determining the admissibility, relevance, materiality, and weight of any evidence. The parties have the right to be heard, to present evidence material to the controversy, and to cross-examine witnesses appearing at the hearing.

Therefore, as long as the arbitration agreement is entered into in accordance with the requirements outlined in AZRS 12-1501 and the arbitration process is conducted in accordance with AZAC Title 14, Chapter 2, Article 15, Section 5, R14-2-1505, you can require employees to sign arbitration agreements in Arizona.

Jurisdiction

Arizona

• Labor