Arbitration clauses are hidden everywhere: cell phone service contracts, credit card agreements, even the user agreement included with the video game you just bought. Any time you buy something or sign a contract, there’s a good chance you are signing away your right to sue and agreeing to binding arbitration. Most of the time, consumers don’t even realize they’ve agreed to arbitration, and almost certainly they don’t appreciation the full implications of that “choice.” The validity of arbitration agreements is often litigated, and in recent years, the US Supreme Court has consistently upheld them, holding people to the “contracts” they signed.
An article in the Los Angeles Times out last week identifies a growing trend: arbitration clauses in employment contracts. It tells the story of an LA janitor, Jose Flores, who claims he wasn’t paid for all the hours he worked.
But Flores, 34, ran into an obstacle when he tried to file a class-action lawsuit to get back his and other janitors’ wages. He had signed away his right to file a lawsuit against his employer.
After being hired, Flores had been presented with a pile of papers to sign. And he had unknowingly agreed not to take any legal problem with his bosses to the courts, but instead go to a private arbitrator handpicked by his employer.
On the surface, Louisiana law seemingly protects workers from the situation Mr. Flores faced. Revised Statute 9:4216 specifically excludes employment contracts – “contracts of employment of labor” – from the Louisiana Binding Arbitration Law. However, many Louisiana courts have held that exemption did not apply to “professional” jobs, or to workers that perform “mental tasks” or “managerial skills.” It’s even less clear how Louisiana courts would interpret the exemption in light of the Supreme Court’s strong support for arbitration agreements in its AT&T Mobility v. Concepcion decision.
The best advice may be old advice: know what you’re signing. Carefully read everything before you put pen to paper, and if you’re uncertain what something in the agreements means, you should ask for clarification. In the context of employment contracts, however, this may be easier said than done. And employers know it.