Courts Limit Enforceability of Arbitration Clauses
Hatch, D. Diane, Hall, James E., Workforce
Two recent federal cases limit an employer's ability to unilaterally enforce arbitration clauses included in personnel forms requiring arbitration of employment claims.
In the first case, Melton Nelson, a technician employed at Cyprus Bagdad Copper Corporation's mine, sued under the ADA in federal court after being fired from his job.
The district court held that Nelson could not sue based on his signing for a handbook requiring mandatory arbitration of disputes. On appeal, the Ninth Circuit Court of Appeals held that, since a waiver of such claims must be knowing and voluntary, signing a blanket acknowledgment of receipt of the employer's handbook did not constitute a valid arbitration agreement. The U.S. Supreme Court denied review of the case. Cyprus Bagdad Copper Corp. v. Nelson, 119 F.3d 756 (9th Cir. 1997), cert. denied, U.S. Sup.Ct., No. 97-1137, 4/20/98.
In the second related case, Tonyja Duffield, a stock broker with Robertson Stephens & Co. …