In Burnett v. Pagliacci Pizza, Inc., 442 P.3d 1267 (Wash. Ct. App. 2019), the D.C. Court of Appeals ruled that the way an employer communicates its arbitration agreement is critical to determining whether it is valid and enforceable. Employers should carefully review their arbitration agreements to ensure they are in compliance with the court`s new decision. Nevertheless, in 2014, the National Labor Relations Board ruled to Murphy Oil that a forced arbitration agreement, in which workers waived their right to participate in collective rights, was an unfair work practice by the employer and was therefore unenforceable. It is important to note that when cases are heard by an NRB judge, the losing party has the right to challenge the review decision by the five-member full chamber and, finally, to challenge the decision in a federal court. It is therefore important to remember that a decision at the NRB level, positive or negative, may not go beyond the appeal process. Federal courts have different jurisdictions for their decisions to enforce forced arbitration agreements. Overall, the questions that will be asked by the courts about an arbitration agreement can be categorized into two categories: substantive scruples and selfishness. All of these elements are explained in more detail below.
It is unlikely that an agreement will be set aside unless a court decides that it is unacceptable both materially and procedurally. Pagliacci`s mandatory arbitration agreement stipulated that a staff member must first present his dispute “in accordance with the F.A.I.R. Settlement Directive” and, if left unresolved, “submit the dispute to mandatory arbitration before a neutral arbitrator, in accordance with the Washington Arbitration Act.” Id. to 1269. The F.A.I.R directive mentioned in the agreement requires that before the arbitration process begins, a staff member must first disclose the “case and all the details” to his or her supervisor, and if the employee is dissatisfied with the resolution, the employee may initiate a non-binding conciliation. Burnett ignored the mandatory arbitration agreement and took his claims directly to the Washingtonstate Court. Pagliacci then fired to force the arbitration, burnett, who wanted to go to court, resisted. In general, courts are highly critical of any restriction of facilitation that, without arbitration agreement, is otherwise available in public courts. As a result, most forced arbitration agreements now explicitly state that there is no limitation on claims or damages that the employee may receive.
Any limitation of the remedies available to the courts greatly increases the likelihood that the agreement will be set aside by courts deemed unenforceable. All that can be said in generally fair is that the higher the cost to the worker to engage in arbitration, the greater the likelihood that the court will beat the arbitration provision as unenforceable. The tendency is not to enforce agreements that impose higher costs on employees than the employee would normally have to pay in court. Ultimately, employers should establish binding arbitration agreements as clearly as possible and give workers the appropriate opportunity to review agreements before they have to sign them. Employers should not “bury” mandatory arbitration agreements in their employee manuals, but agreements should be clearly presented so that a worker can have a reasonable choice whether or not to enter into the contract. The best practice is to sign the arbitration agreement in a separate document from the employee. Finally, although the Washington Court of Appeals decision is the law in Washington for now, the Supreme Court in Washington will soon have concluded the final word on standards for mandatory arbitration agreements between employers and workers.