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The California Court of Appeal affirmed an order denying an employer's motion to compel arbitration because the employee exercised his right to opt-out of the dispute resolution program and the program was mandatory only for new employees.
In Holland v. Trav Corp., No. B190811, 2007 WL 778874 (Cal. Ct. App. Mar. 16, 2007), Trav Corporation, doing business as Westwood College (College), employed Holland as an adjunct professor in its technology department. When sued by Holland, the College filed a motion to compel arbitration pursuant to a mandatory dispute resolution program that applied to all new employees hired after May 1, 2003.
Holland was hired in March 2003, at which time employees were given an opportunity to opt out of the dispute resolution program. Holland signed a form opting out of the program. In support of its motion to compel arbitration, the College argued that Holland agreed to the arbitration program when he accepted employment as a "new employee" for the March 2005 term. The College's policy was to offer adjunct professors new employment contracts each term.
The Court refused to compel arbitration for the following reasons. First, the College failed to present any evidence that Holland actually signed an agreement to arbitrate, which is required for a court to compel arbitration under California law. Cal. Civ. Proc. Code § 1281. Moreover, there was plenty of evidence that Holland opted out of the dispute resolution program.
Second, the Court noted that the evidence tended to show that Holland was a continuous employee since March 2003 and not a "new employee" in March 2005. Holland worked at the College for all terms since March 2003. Additionally, Holland participated in the College's 401k savings plan, which was only available to employees who had been working at the College for at least 90 consecutive days.
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