Can an employer force its employees to sign an arbitration contract by firing the employees if they refuse to sign the contract?
1 Answer from Attorneys
If the arbitration contract is substantively fair to the employees, then the employer could indeed force the employees to sign an arbitration agreement. "Substantively fair" means, among other things, no limitations on the remedies the employee could seek, and no arbitration costs are placed on the employee that would make the arbitration more costly than a court proceeding.
The "take-it-or-be-fired" nature of the provision would be weighed in deciding whether the provision is enforceable, if the employer decided to sue to enforced his or her rights. A completely fair provision, however, would be enforced.
If the provision is not substantively fair, then the court would either refuse to enforce the unfair part, or refuse to send the case to arbitration. It is unclear whether a court would say that firing an employee for failing to to sign what is obviously an unfair agreement would allow the employee to sue for wrongful termination. I know of no court decision squarely deciding this matter.
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