Ninth Circuit Finds Revisions To Arbitration Policy In Employee Handbook Effective And Enforceable

The Ninth Circuit recently reversed a district court’s denial of a motion to compel arbitration of an employee’s claims that were brought as a putative class action against her employer, Nordstrom. The basis for the motion to compel was an arbitration provision contained in Nordstrom’s employee handbook. The arbitration provision had been modified to preclude employees from bringing class action lawsuits after the employee received the handbook.

The employee argued that she did not have reasonable notice of the change based on a provision in the employee handbook that required Nordstrom to provide employees with 30 days written notice of any substantive changes to the arbitration provision. The handbook provided that the notice provision was included to “allow employees time to consider the changes and decide whether or not to continue employment subject to the changes.” To comply with the notice provision, Nordstrom sent letters to employees in June 2011 informing them of the change in the arbitration policy. Nordstrom did not seek to enforce the new arbitration provision during the 30-day notice period, but the letter was silent in that regard and stated that the revised arbitration provision was the “current version.” Applying California law, the Ninth Circuit ruled that Nordstrom had satisfied the minimal requirements for providing employees with reasonable notice of a change to its employee handbook by sending the letter to the employees informing them of the modification, and by not seeking to enforce the arbitration provision during the 30-day notice period. The Ninth Circuit also held that Nordstrom was not bound to inform the employee that her continued employment after receiving the letter constituted acceptance of new terms of employment. Davis v. Nordstrom, Inc., No. 12-17403 (9th Cir. June 23, 2014).

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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