Employee Remaining on the Job is Assent to Arbitration Agreement

The California Court of Appeals in Diaz v. Sohnen Enterprises, Inc. overturned a district court decision denying a motion to compel arbitration agreement.

Sohnen Enterprises held a meeting at which it informed employees that it was introducing a new arbitration agreement. Sohnen told employees that if they chose not to sign the new agreement but continued to work then that would mean they accepted the arbitration agreement. Erika Diaz refused to sign the arbitration agreement but continued to work for Sohnen from December 2 to 23. She then had her lawyer send her employer a letter saying that she planned to keep working but did not accept the arbitration agreement. After bringing a workplace discrimination case, Diaz challenged the employer’s motion to compel arguing that she never assented to the new agreement. The court of appeals, over a dissent, disagreed saying that her decision to continue work was an implied assent to the agreement. By the time her lawyer sent a letter Diaz was already bound.

National Law Review and Manatt discuss the case.