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Handbook Arbitration Provisions Take Another Hit

Posted by Frank Steinberg | Nov 30, 2015 | 0 Comments

For the second time time the last two months an employment dispute arbitration provision has been invalidated because it was contained in an expressly non-contractual employee handbook.  The first was from New Jersey, as we posted at the time.

Now, in Lorenzo v. Prime Communications, the US Court of Appeals for the 4th Circuit has come to the same conclusion, applying North Carolina law.

So we'll say it again.  Employers, if you want to have an enforceable arbitration agreement for employment disputes, put it in a separate agreement.  Do not hide it in a handbook that is loaded with disclaimers saying that it's not a contract, and then, when it suits your purposes, argue that it really is a contract.  The courts have caught on to this “have your cake and eat it too” game, and they are rapidly levelling the playing field for your employees. 

About the Author

Frank Steinberg

Frank is the founder and principal of Steinberg Law, LLC. A Jersey boy born and bred, he focuses on employment litigation and counseling, business litigation,  and aviation law. Following law school and a clerkship in the federal district court Frank spent his early career with large litigation ...

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