Employee handbook didn't create duty to arbitrate

Today's quiz: A new employee signs a form saying she has read the employee handbook. The handbook says it is "not intended to be a contract." The handbook also says "I will utilize binding arbitration to resolve all disputes that may arise out of the employment context." So the question is whether the employee has agreed to arbitrate her claims for sexual harassment, sex discrimination, wrongful termination, and intentional infliction of emotional distress.

Answer: No. Esparza v. Sand & Sea, Inc. (Cal Ct App 08/22/2016) [Opinion full text].

I'll save you the details. Here's how the court summarizes the situation:

The question in this case is whether an arbitration provision in an employee handbook is legally enforceable. The employee handbook containing the arbitration provision included a welcome letter as the first page, which stated, “[T]his handbook is not intended to be a contract (express or implied), nor is it intended to otherwise create any legally enforceable obligations on the part of the Company or its employees.” The employee signed a form acknowledging she had received the handbook, which mentioned the arbitration provision as one of the “policies, practices, and procedures” of the company. The acknowledgement form did not state that the employee agreed to the arbitration provision, and expressly recognized that the employee had not read the handbook at the time she signed the form. Under these circumstances, we find that the arbitration provision in the employee handbook did not create an enforceable agreement to arbitrate. We therefore affirm the trial court's denial of the employer's petition to compel arbitration.

The employer wanted to have no contract when it was convenient, and to have a contract when that was convenient. Can't really have it both ways.