Legal Question in Business Law in California

Re: Right to Refuse Arbitration in the Workplace

I'm afraid it is, unless the new policies conflict with an existing employment contract. The general rule is that an employer may fire anyone at any time for any legal reason or for no reason at all. The company could fire people who have no contracts for refusing to accept the new policy; what you describe is less drastic and is thus also within the company's rights as to at-will employees.

A final note: Whether you have a contract and whether the new policies conflict with it may not be as easy to figure out as you might think. To take just one example, employee manuals sometimes create binding contracts between the employer and the employees. You may want to consult with a lawyer about your situation before you decide what to do.

Re: Right to Refuse Arbitration in the Workplace

I agree with Mr. Hoffman up to a point. The employer can usually dismiss an employee for any good reason, or for no reason at all. However, it is often said that the employer cannot dismiss an employee for a bad reason. Refusing to sign a coercive and unlawful arbitration agreement might be considered retaliatory and therefore a bad reason.

Further, it's possible that even if the employee signed the agreement, it would not be enforceable against her or him. Employer-employee arbitration agreements are lawful and enforceable as a general matter, but the California Supreme Court has placed limits on them, both as to what subject-matter is arbitrable and as to procedural fairness.

The leading case seems to be Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, in which a divided court held that certain statutory employee rights were off-limits, and that the arbitration procedures couldn't be pre-set so as to give the employer an advantage. The decision is 45 pages long (on WestLaw) and really too long and complex to describe fully here, but you can look it up. Another more recent but less interesting case is Gentry v. Superior Court (2007) 42 Cal.4th 443. There are many, many other cases on this subject in California, mostly in the lower court, the Court of Appeal.

In your situation, I think giving up your right to an attorney is a clear example of unlawful unfairness. It is customary for parties to be represented by attorneys in routine civil arbitration matters, including the arbitration hearing itself. If indeed you are asked to give up the right to be represented by counsel during an arbitration, the agreement is probably unenforceable, at least to the extent of that provision.

So - there are two aspects here. Can you be coerced to sign, under threat of no promotion, or even dismissal? Maybe, maybe not. Can the arbitration agreement, once signed, be enforced? Probably not, at least in some respects.