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A federal court in Pennsylvania held that an employer failed to demonstrate the existence of an enforceable arbitration agreement because the employee had not been properly notified of the agreement's terms and the terms themselves were permissive and non-imperative.
In Hudyka v. Sunoco, Inc., No. 06-2891, 2007 WL 208516 (E.D. Pa. Jan. 26, 2007), Hudyka sued his former employer, Sunoco, for alleged age and race discrimination. Sunoco moved to compel arbitration under a policy delivered to Sunoco employees through an inconspicuous email and instituted three months prior to Hudyka's termination.
The Court found no enforceable agreement to arbitrate and therefore denied Sunoco's motion to compel arbitration. As a general rule, employers are free to enact arbitration agreements through notices or changes to employee handbooks, provided that the employee "accepts" the new agreement through continued employment. However, the email that supposedly notified Hudyka of the arbitration agreement was extremely vague, and Sunoco made no subsequent attempt to verify that Hudyka understood and accepted the agreement's terms.
Even if Hudyka had been properly notified, the Court would not have enforced the arbitration agreement. The agreement used permissive language, such as "an employee may" and "an employee has the option to proceed" in describing the employee's ADR obligations. Thus, both the email and the agreement itself lacked the requisite definiteness to bind Hudyka to arbitrate his claims.
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