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Is an employment mandatory arbitration clause enforceable if I change jobs in the same company?

San Diego, CA |

I was hired as a sales person and made commissions. I signed an arbitration agreement when I was hired. I was later promoted into a different department with different duties and a different commission structure. I never signed an arbitration agreement for the new position. I am now being discriminated against because of my gender (woman). Can they make me go to arbitration if I file a claim?

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Attorney answers 5


The company will argue that the arbitration agreement still applies even in your new position. Arbitration agreements in employment lawsuits in California must meet certain standards so even if the company alleges the agreement is enforceable a Court may not in fact enforce it. An employment lawyer would have to review the agreement to see if it is likely valid or not.


The answer depends on what the contract says. If it says that the agreement remains in effect as long as you are employed by the company, as is likely, then you are bound despite having changed positions in the company. Sometimes arbitration clauses can be successfully challenged as unconscionable, or because they fail to contain required provisions set by statute for particular types of contracts. You really need to have a lawyer review the document.


Generally, changing a position within the company does not affect your agreement to arbitrate your disputes with an employer, if , as other attorneys pointed out, the agreement is otherwise valid and meets the so called "Armendariz" criteria for being enfroceable.

Arbitration is not necessarily such a bad thing, however. Although being able to sue in court has certain advantage, in some cases, arbitration is a better route for employees.


Arkady Itkin


The wording of the arbitration clause is important. If the arbitration clause is "unconscionable," you can argue that you should not be bound by it. You should have an attorney review the clause. The fact that you changed positions within the company should have no bearing on whether the arbitration clause is binding.


The short answer is that yes, under Michigan law you will be required to go to Arbitration so long as the agreement does not improperly limit the damages to be recovered. The mere fact you changed positions will not effect the arbitration agreements enforceability. To otherwise advise you on the enforceability of the agreement, I would have to actually look at the agreement. Under Michigan law though, Arbitration is highly favored.

Each employment situation has unique facts and circumstances. This means that information and advice cannot be taken literally and should be used as only informational. The information provided here is not legal advice and should not be interpreted as such.

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