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California At-Will Employees Bound to Lawful Policy Changes by Continuing to Work after Their Adoption 

In Diaz v. Sohnen Enterprises, California employer Sohnen Enterprises instituted a mandatory dispute resolution policy requiring that all employee claims be arbitrated. “Arbitration” is a private dispute resolution tool, bypassing court trials by jury.

The company informed the employees of the new policy and that, even if they did not sign it, continued employment constituted acceptance of the agreement.

At-will employee Erika Diaz objected to the agreement. “At-will” permits either employer or employee to terminate the relationship at any time, with or without notice and with or without a reason.

Company representatives reiterated to Ms. Diaz that, regardless of her objection, if she continued to work for the company, she would be accepting the policy. While Diaz stayed on the job, she challenged the arbitration policy by filing suit.

Ms. Diaz won at the trial court level. The Court of Appeal reversed, reasoning that Diaz was clearly on notice that continuing employment constituted acceptance of this legally permissible, unilateral change in employment terms for at will employees.

If a company wishes to make such policy changes, an experienced employment lawyer can help position the transition to minimize the prospect of repercussions.

See also:  

·        The Truth: Get It In Writing (April, 2019)

·        The Need for Written Employment Agreements (March, 2018)

·        Don’t Kill At Will Employment (June, 2010)

For further assistance, please contact one of our attorneys Tim Bowles, Cindy Bamforth or Helena Kobrin.

Helena Kobrin

May 10, 2019