The Role of Evidence in Compelled Arbitration

When it comes to compelling or resisting arbitration, evidence is still a crucial component. A Court of Appeal ruling in Avery v. Integrated Healthcare Holdings earlier this year upheld the trial court order that denied motions for compelling individual arbitration. The plaintiffs had filed a wage & hour class action against the defendants, claiming that the failure to pay overtime in an appropriate manner had caused employees damages. The defendants responded with eight separate motions to compel individual arbitration against those plaintiffs. All of these motions were denied by finding that the defendants had failed to demonstrate the existence of enforceable arbitration agreements to which the employees would be subject.

Integrated claimed that the plaintiffs were obligated to individual arbitration under the Fair Treatment Process in the employee handbook and the Alternative Dispute Resolution Process in the employee handbook. Courts determined that the defendants were limited only to the Fair Treatment Process; the employee handbook and alternative dispute resolution process was instituted after the claims brought forth by the plaintiffs. The court also determined that Integrated did not notify the plaintiffs in the case or any other employees about the handbook itself. It was found that the alternative dispute resolution treatment process was created as the new name for the fair treatment process, a change that was made four months after the plaintiffs submitted their complaints.

Part of the changes to the Fair Treatment Process completed by Integrated included clauses allowing the company to change or alter the Fair Treatment Process as needed without any advance notice or employee consent. Even though the update was posted on their website, no effort was made to make employees aware of its existence.

The Court did not support the demands for arbitration on behalf of the company by stating that the right to unilateral modification should be steered by good faith and fair dealing. The employer in such a contract situation is required to exercise that right to make changes in good faith and not in an effort to deprive an employee of what would otherwise be reasonable expectations under the existing agreement. In this case, the company did not make the changes in good faith. Finally, the Court stated that while an arbitration agreement stipulation in the contract could be enforceable, evidence must back up the claims of its existence. In this situation, a lack of evidence and good faith hurt the employer's case.

Comments? Questions? Email Here

© HowtoAdvice.com