Q: Can an employer require you to sign a retroactive arbitration agreement?
Employer recently changed 90% of "exempt" staff who did not meet the wage requirements to hourly because of a pending lawsuit by a former employee and is now amending the handbook with an arbitration agreement. Will the agreement cover retroactively even though they were in violation of labor laws and now wish to cover themselves?
A:
Yes. If you sign the arbitration agreement, then it will probably cover all disputes between you and your employer, except for Private Attorney General Act claims.
If you refuse to sign the arbitration agreement, your employer can terminate your employment.
Finally, some arbitration agreements are found invalid and unenforceable if they are procedurally and substantively unfair or unconscionable.
Neil Pedersen agrees with this answer
A:
It depends on what you mean by retroactive. The current state of the law in California is that you can be required to sign an arbitration provision as a condition of employment. There was a law that was passed that prohibited that. However a federal court has enjoined enforcement of that new law pending a challenge of it. So for now it is the law.
When you say retroactive, if you mean that any now pending lawsuits would have to be arbitrated, the answer is no. That kind of retroactivity would not occur. However, for any issue that has not yet been filed as a lawsuit, those claims, with one narrow exception, could be forced into arbitration.
Know that some arbitration clauses can be invalidated and rendered unenforceable if the provision is procedurally and substantively unconscionable, or based on some other contract defense. It would be wise to have an attorney look at the provision before commencing any arbitration under that provision.
Good luck to you.
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