Employee handbooks typically contain an overview of company history, a set of employment policies and general guidance, and a clear and prominent disclaimer that nothing in the handbook creates a contract of employment between the company and its employees. The Raymours Furniture Company handbook went one step further—it also contained a mandatory arbitration agreement, which purported to require employees to arbitrate any and all employment related claims against the company. Raymours Furniture Company, Inc. v. Rossi, Civ. No. 13-4440 (D.N.J., Jan. 2, 2014). After an employee sent a demand letter to Raymours asserting various claims of discrimination, the company moved to compel arbitration pursuant to the handbook’s arbitration agreement. The court ruled against the company, finding that the arbitration agreement was unenforceable. It noted that the clear disclaimer on the handbook’s first page, which began: “THIS HANDBOOK IS NOT A CONTRACT OF EMPLOYMENT,” did not expressly exempt the arbitration policy. As such, the handbook did not clearly and unambiguously confirm the employee’s agreement to arbitrate. Moreover, Raymours’ reservation of its right to change the contents of the handbook at any time without notice rendered the arbitration provision illusory and unenforceable.
Two recent rulings in the Northern District of Illinois, Eastern Division and the Central District of Illinois, Peoria Division, have further blurred the “bright line” two-year consideration rule established by the Illinois First District Court of Appeals…
On June 16, 2014, the U.S. Securities and Exchange Commission (SEC) resolved its first whistleblower retaliation enforcement action. The SEC’s order against Paradigm Capital Management, Inc. is the first-ever enforcement action brought by the agency under the anti-retaliation provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Employers…..
Estate of Ruszala v. Brookdale Living Comm., Inc., No. A-4403-10 (N.J. App. Div., August 10, 2010) – In this personal injury case, the Appellate Division analyzed the enforceability of a contractual arbitration provision, which required that all claims between the parties (a resident and a nursing home) be resolved through binding arbitration. The provision contained significant restrictions on discovery, limits on compensatory damages and an outright prohibition on punitive damages. The court voided these provisions, finding that they were substantively unconscionable. Although this was not an employment case, employers preparing arbitration agreements must be mindful that any similar restrictions on employees’ rights such as limitations on discovery and recoverable damages may result in the provisions being stricken.