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Federal court in Bangor rejects University of Phoenix’s attempt to force case into arbitration

On April 5, the United States District Court in Bangor rejected the University of Phoenix’s attempt to force a former employee to bring his case against it before a private arbitrator, instead of in court. The University of Phoenix based its argument on a provision in the employee handbook that it required employees sign as a condition of their employment. The provision stated that employees had to bring any claims against the University of Phoenix before a private arbitrator instead of filing them in court. However, the employee handbook also contained a provision which said that the University of Phoenix could change the terms of the handbook any time it wanted. The handbook also did not require the University of Phoenix to even notify employees before it made any changes to it.

The court refused to enforce the arbitration provision in the employee handbook. In order for an arbitration agreement in an employee handbook to be enforceable, it has to contain obligations for both the employee and the employer. In this case, since the University of Phoenix could change the terms of its employee handbook any time it wanted, it could avoid any obligations that the handbook required of it. When an employer reserves the right to change its employee handbook any time it wants and also does not even give employees a chance to decide whether they want to continue to work for it after it makes a change, the arbitration provision in the handbook is unenforceable.

The University of Phoenix is one of many employers who have decided to force employees to give up their Constitutional right to bring a case against it in court if it violates their rights. Employers prefer arbitration for many reasons such as the fact that they are private, outside of public view; employees have less opportunity to gather evidence against the employer in arbitration; and employers prefer to defend claims before arbitrators who they pay and who may depend on the employers for repeat business.