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

Yes, you can require employees to sign arbitration agreements in California. However, there are certain requirements that must be met.

What are the requirements?

The requirements for arbitration agreements in California are as follows:

  1. The agreement must be in writing [3.2].
  2. The agreement must be signed by the parties or contained in an exchange of letters, telex, telegrams, or other means of telecommunication which provide a record of this agreement [3.2].
  3. The agreement must not be part of a contract of adhesion [1.1].
  4. The agreement must not be unconscionable [1.1].
  5. The agreement must comply with the ethics standards for arbitrators adopted by the Judicial Council [1.6].
  6. The agreement must not require the employee to waive any statutory rights, including the right to file a complaint with the Labor Commissioner or the right to file a claim under the Private Attorneys General Act (PAGA) [1.1].
  7. If the arbitration agreement requires the drafting party to pay certain fees and costs before the arbitration can proceed, the drafting party must pay those fees and costs within 30 days after the due date. Failure to do so will result in the drafting party being in material breach of the arbitration agreement and waiving its right to compel arbitration [1.2].

It is important to note that there are additional requirements for arbitration agreements in the consumer context [1.1][1.4]. Additionally, if an arbitration agreement is found to be unenforceable, the parties may be able to proceed with litigation in court [1.1].

Therefore, it is recommended that you consult with a legal professional to ensure that your arbitration agreement complies with all applicable requirements.

[1.1]: Ccp Code CACL 1281.92 [1.2]: Ccp Code CACL 1281.97 [1.4]: Ccp Code CACL 1281.98 [3.2]: Ccp Code CACL 1297.72 [1.6]: Ccp Code CACL 1281.85

Source(s):
Jurisdiction

California