- The 5th U.S. Circuit Court of Appeals affirmed a jury's decision that an employee bringing an overtime pay claim had been given sufficient notice of a mandatory arbitration provision (Galan v. Valero Services, Incorporated, No. 19-40075 (5th Cir. Sept. 23, 2019)).
- The employer, Valero Services, had a mandatory arbitration program called "Dialogue." At trial, the employee admitted that he knew the program existed, but said he thought it was a program for addressing interpersonal conflict, preventing workplace violence or helping those with depression. The employer presented evidence that it mailed a brochure about the program to all employees; referred to the program in its employee guide, which was distributed to all employees; posted a description of the program on its internal website, which employees could access from their home pages by clicking a link titled “Dialogue Dispute Resolution Program”; and placed posters describing the program around the employee's workplace.
- "The record contains ample evidence supporting the jury's finding that Galan had unequivocal notice" of the mandatory arbitration program, said the 5th Circuit. Accordingly, it upheld the jury's verdict in favor of Valero.
An employer's policies don't carry much weight with fact finders if it's not clear that employees have been adequately informed of them. Here, the employer was able to show that it did a good job communicating its mandatory arbitration program in multiple ways: via mail, on the company website, in the employee guide and on posters throughout the workplace.
Notably, a company in the 8th Circuit lost its case involving arbitration because it only had the provision in the employee handbook, which the company could not prove had been read in its entirety by the plaintiff. Simply providing a handbook was not an enforceable agreement to arbitrate, the court said.
Mandatory arbitration provisions like the one at issue here are common and are often deemed sound from a legal perspective. Employees, however, are increasingly taking issue with them, arguing they unfairly favor employers. For this reason, many employers are starting to curtail the provisions' use, particularly when the dispute involves a sensitive issue like assault or harassment. Google and Facebook, for example, both have discontinued mandatory arbitration for sexual harassment disputes.