Employment Arbitration Agreements Must Be Fair

It is common today for employers to ask employees to sign agreements to arbitrate any future disputes about work-related issues, because arbitration is often faster, less expensive and more private than litigating such disputes in a court.

But if arbitration agreements are too one-sided, complex, or unfairly tilted in the employer's favor, judges may declare them unenforceable. That was the outcome of a case recently decided by the California Court of Appeal (Beco v Fast Auto Loans).

In 2014, Bernell Beco was hired as a salesman, at $13.50 an hour, by an affiliate of Fast Auto Loans that made payday loans to consumers. Two years later he moved to Fast Auto, as a branch manager. In March of 2016, Fast Auto required all its employees to sign a four-page arbitration agreement as a condition of employment.