Employers should be careful about not only the contents of an arbitration agreement but the process by which they ask employees to sign the agreement.  

A court’s recent refusal to enforce an employer’s arbitration agreement in Velverde v. Monroe Operations serves as an example of how not to present an arbitration agreement during employee onboarding.  In Valverde, the new hire met with a human resources manager who provided 31 documents to sign as quickly as possible before she could begin work that day.  The employee initially refused to sign the agreement because she did not understand it.  She also asked if she needed to sign to start work.  The HR manager confirmed she needed to sign to begin work and said, “This will help us resolve any issues without having to pay lawyers.”  The court was particularly troubled by the HR manager's false representations in finding that the agreement was unenforceable.

Employers wishing to reduce the risk that a court finds its arbitration agreement “unconscionable” (and therefore unenforceable) may wish to consider the following practices:

1. Keep the arbitration agreement as a standalone document for review (not buried in a handbook or another company document).
2. Provide employees sufficient time to review and inform them of their right to consult with an attorney.  Include language in the arbitration agreement confirming that the employee had the opportunity to consult with counsel.
3. Train onboarding personnel to direct a new hire to consult their own attorney regarding questions about the agreement (rather than providing legal advice themselves) to mitigate potential claims of misrepresentation.