Here is a recent arbitration case of interest, followed by a short summary of what it means to you:
Waiver of Mandatory Arbitration Provision Must Be Knowing. Kummetz v. Tech Mold, Inc., 152 F. 3d 1153 (9th Cir. 1998)
William Kummetz worked for Tech Mold as a steel mold maker in its prototype department. After four months of employment, Tech Mold sought to demote Kummetz to a miller position, claiming that he lacked the skills necessary for the mold maker position. Kummetz asserted that the company did so only after learning that he previously had undergone a kidney transplant. He then resigned and filed an action under the Americans with Disabilities Act.
The district court granted summary judgment for Kummetz, finding that he had waived his right to bring a civil action by accepting Tech Mold’s mandatory arbitration provision at the time he began employment. The Court of Appeals reversed.
Shortly after beginning his employment with Tech Mold, Kummetz had received an Employee Information Handbook and an Acknowledgement form for that Handbook. The Acknowledgment form confirmed Kummetz’s understanding that he was subject to the terms of the Handbook, and reaffirmed his at-will status. The form made no mention of the company’s mandatory Dispute Resolution Policy, which was referred to, but not included, in the Handbook.
In concluding that Kummetz was not bound by the mandatory arbitration provision, the Court first reaffirmed that employees can waive their right to bring civil claims under the ADA and other civil rights laws. However, in order for such a waiver to be valid, the court held, it must be truly knowing: “the choice must be explicitly presented to the employee and the employee must explicitly agree to waive the specific right in question.” Because the Acknowledgement form Kummetz had signed made no mention of the mandatory arbitration provision, the court held that Kummetz had not made a knowing waiver. The court concluded: “Only if Tech Mold had specifically called Kummetz’s attention to the arbitration clause in the booklet would the clause suffice in the face of the uninformative Acknowledgement.”
What It Means to You:
Kummetz is a good reminder of the (at least in the Ninth Circuit) general hostility to employer policies that require employees to waive their right to bring civil actions for alleged civil rights violations. Any employer seeking to implement such a policy must do so in a very overt way that specifically advises the employee of the nature and scope of the waiver. The court hinted that even that might not be sufficient, however. Because the court found Kummetz’s waiver was invalid, it did not address Kummetz’s additional contention any that such waiver, when made a condition of employment, violates the Civil Rights Act of 1991. Employers should expect the Ninth Circuit to address that question in the not-too-distant future.
Source: “The Purple,” Copyright Landels Ripley & Diamond, LLP, Fall 1998. Reprinted with permission.