Employers, beware: Don't delay if you want to compel arbitration of claims

A well-drafted arbitration agreement is crucial to ensuring that employment claims will be resolved by final and binding arbitration. However, it's equally important to move quickly to enforce an arbitration agreement when an employee files a claim outside the designated arbitration forum and avoid taking action inconsistent with an intent to arbitrate.

Empty threats undercut employer's case

Alfonus Younan worked as a sales representative for Fleming Distribution Company from 2009 to 2016. In June 2017, he filed a complaint against Fleming with the labor commissioner claiming he was owed $22,000 in commissions plus penalties and interest. Fleming asked the commissioner to dismiss the complaint because Younan had signed an arbitration agreement that broadly stated:

To resolve disputes in an efficient and cost-effective manner, Employee and Employer agree that any and all claims arising out of or related to the employment relationship that could be filed in a court of law . . . shall be submitted to final and binding arbitration, and not to any other forum.

On August 31, 2017, Fleming asserted in a letter to the labor commissioner that the complaint should be dismissed based on the parties' signed arbitration agreement. The company further stated that if the labor commissioner refused to dismiss the complaint, it would petition the court to compel arbitration. The labor commissioner didn't dismiss the complaint, and Fleming didn't file a petition to compel arbitration.