Arbitration Provisions in Employee Handbooks are Generally not Enforceable in California

The California Court of Appeal, Second District, recently held that employers’ arbitration policies set forth in the employee handbook generally do not amount to an enforceable agreement between the employer and employees. In Sparks v. Vista Del Mar Child & Family Services, the court held that plaintiff-employee was not bound by the arbitration clause in the employee handbook, which he had acknowledged receiving, because the “clause was included within a lengthy employee handbook; the arbitration clause was not called to the attention of plaintiff, and he did not specifically acknowledge or agree to arbitration; the handbook stated that it was not intended to create a contract; the handbook provided that it could be amended unilaterally by defendant and thus rendered any agreement illusory; the specific rules referred to in the arbitration clause were not provided to plaintiff; and the arbitration clause [was] unconscionable.” Accordingly, the court affirmed the trial court’s order denying the employer’s motion to compel arbitration of plaintiff-employee’s wrongful termination action. The Sparks case provides yet another example of California courts’ reluctance to enforce arbitration agreements, despite the United States Supreme Court decision in AT&T Mobility v. Concepcion.