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Contract voided by California appeals court ruling

Employees of all sorts of enterprises in California find themselves agreeing to wide-ranging employment agreements, from injury waivers to nondisclosure orders. Most of these documents are designed to give employers the upper hand in the case of a claim, but many rights cannot be legally signed away even if that’s what an employee wants.

A court of appeal in California’s Third Appellate District recently denied an attempt to force an employee into arbitration over a workplace dispute. Many employers try to maintain control of dispute resolution methods by requiring complaints to be arbitrated under their own terms and occasionally by their own personnel. But the construction of the agreement made it unenforceable under California law, leading the judge to render the entire agreement moot.

The waiver of an employee’s rights under the Private Attorneys General Act, which allows residents of the Golden State with labor disputes to seek damages in a civil court trial and have a jury decide their case, was improper because the terms of forcing employees into arbitration ran counter to the rest of the contract. Whether or not a matter may be arbitrated outside the court system then becomes the domain of the court itself under the valid terms of the contract.

Even when employers claim they may compel arbitration to resolve a contract dispute, the would-be plaintiffs with an argument for restitution or financial damages have options to press their cases. An attorney can help consult on individual cases of contract breaches or other contract disputes to give clients the best chance at resolving a contract issue to their satisfaction.