Metters v. Ralphs Grocery Co.:  Don't Disguise Your Arbitration Agreement

A recent California Appellate Court case, Metters v. Ralphs Grocery Co., sends a clear message to employers:  don't disguise your arbitration agreement if you want it to be enforced.  In Metters, the plaintiff employee wanted Ralphs to internally investigate his claim of discrimination.  Ralphs, however, wanted the employee to first sign off an an ambiguously titled "Notice of Dispute and Request for Resolution Form."  The form contained an area where the employee could set forth discrimination claims.  It contained language indicating that the employee could voluntarily mediate disputes with the company.  And it indicated that the employee, by submitting the form, was agreeing to mandatory, binding arbitration of any "covered disputes" as defined in a "Policy" of Ralphs' that was referenced but not attached, and according to the employee, never provided.  The employee signed the form and submitted it.   

The employee claimed he made numerous attempts to follow up with Ralphs regarding his complaint, but received no response.  He subsequently tried to sue Ralphs for discrimination, and Ralphs moved to compel arbitration.  The employee opposed the motion, claiming that he had never agreed to arbitrate his case. 

The trial court ruled that the employee was not bound to arbitrate his claims.  The court of appeal upheld the trial court's finding that there had been no "meeting of the minds" between the employee and Ralphs regarding arbitration.  The "ambiguous, nebulous form" might have been something a "transactional attorney sitting in an office somewhere" could have determined to be an arbitration agreement, but the employee could not be expected to figure that out.  

The lesson for employers?  Make sure your arbitration agreement looks, smells, and tastes like an arbitration agreement.  Clearly label your agreement, and spell out the consequences for an employee that signs it (waiver of jury trial, specific claims to be arbitrated, etc.)  Make it a stand alone agreement.  If the agreement says something is attached, make sure it is attached. And do not condition the investigation of claims of discrimination, as Ralphs did, on an employee's willingness to sign the agreement.  

[This post does not constitute legal advice. For advice regarding specific situations, seek legal counsel.]