To Institute Arbitration, Employers Must Make Employee Acceptance a Condition of Continued Employment

On December 15, 2017, the United States District Court for the Eastern District of Michigan issued an opinion reinforcing the principle that an employer may only institute arbitration as a dispute resolution mechanism for existing employees if the employer expressly informs the employee that continued employment is contingent upon the employee’s acceptance of the arbitration mechanism. In Cerjanec v. FCA US, LLC, No. 17-10619, 2017 WL 6407337 (E.D. Mich. Dec. 15, 2017), the plaintiffs alleged that an employee-evaluation policy worked a disparate impact on employees aged 55 or older, resulting in missed career advancements, bonuses, and other employment opportunities. The employer sought to compel arbitration, asserting that the plaintiffs “assented to arbitration when they continued to work at the employer after receiving notice of the arbitration policy.” 2017 WL 6407337, at *1. Specifically, the employer argued that those plaintiffs entered into binding agreements to arbitrate when they continued to work for the employer after receiving, in 1995, an Employment Dispute Resolution Process notice (the “EDRP”), stating that non-union employees must submit most employment-related disputes to arbitration. The notice informed employees that “IT APPLIES TO YOU.  It will govern all future legal disputes between you and [the employer] that are covered under the Process.” The Court found no merit in the employer’s argument that the employees agreed to arbitration simply by remaining employed after receiving the EDRP. The Court found...

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