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First Circuit holds that janitors signed onto arbitration agreement they never saw

Yesterday, the First Circuit Court of Appeals held that a group of janitors must pursue their claims against the cleaning company that employed them in arbitration, rather than through the court system. The janitors have brought claims against the company, Coverall North America, Inc., because they claim, among other things, that it misclassified them as independent contractors and, as a result, failed to pay them all of the wages the law required it to pay. The Court determined that the janitors agreed to pursue these types of claims in arbitration when they signed an agreement with the company which referenced another agreement–an agreement the janitors never saw–that contained an arbitration clause. In reaching this holding, the Court reversed the decision of the U.S. District Court in Massachusetts which had held that the janitors could not be bound by this arbitration agreement because they had no notice of its existence.

Arbitration agreements have become more and more common. Employers that compel employees to sign these arbitration agreements essentially require the employees to give up their constitutional right to a jury trial as a condition of their employment. Many employers require their employees to sign these arbitration agreements because, in some respects, the arbitral forum is more beneficial to employers than the courts. Employers prefer arbitration for many reasons such as the fact that it is 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.