Language In The Employee Handbook Undercut The Existence Of An Agreement To Arbitrate.
When January Esparza sued her employer for sexual harassment and related causes of action, the employer petitioned to compel arbitration, based on the fact that Esparza had acknowledged receipt of an employee handbook, and the handbook mentioned that the employer’s policies, practices and procedures included arbitration. The trial court denied the motion, finding no agreement to arbitrate. Esparza v. Sand & Sea, B268420 (2/4 8/22/16) (Collins, Epstein, Willhite).
The handbook included a welcome letter stating, “[T]his handbook is not intended to be a contract (express or implied), nor is it intended to otherwise create any legally enforceable obligations on the part of the Company or its employees.” The acknowledgment signed by the employee did not state she agreed to the arbitration provision, and recognized she had not read the handbook when she signed the form. Under those circumstances, the Court of Appeal found that there was no enforceable agreement to arbitrate, and affirmed.
COMMENT: The problem with the handbook here could have been avoided by giving the employee a conspicuous arbitration agreement to sign or acknowledge in writing at the time she entered into the employment relationship. Esparza relies heavily on Mitri v. Arnel Management Co., 157 Cal.App.4th 1164 (2007) – another good case to look at when considering whether the employee handbook creates a mutual agreement to arbitrate.