Our Clients Ask Us: Waiver Of Right To Sue

Q: Can my company include a provision in an employment application that requires prospective employees to waive their rights to sue in a judicial forum over workplace disputes?

A:

Yes, as long as the employees “knowingly, intelligently and voluntarily” waive their rights to sue over workplace disputes. Otherwise the employees have not effectively waived their rights.

Courts have ruled that job applicants who sign waivers promising not to sue their employers over workplace disputes are not automatically barred from filing lawsuits in court

Courts have invalidated agreements signed by employees when they found

that at the time the employees signed the waivers, they had no idea what the company’s grievance review process entailed, nor were they informed of their right to revoke their waiver or given the chance to ask questions.

In order for an employee to provide a “knowing and voluntary” waiver of his or her right to sue, the employee must be provided with an explanation of his or her rights under the agreement and what the alternatives to litigation would entail. In determining whether a waiver was executed knowingly and voluntarily, courts consider: (1) the employee's experience, background, and education; (2) the amount of time the employee had to consider whether to sign the waiver, including whether the employee had an opportunity to consult with a lawyer; (3) the clarity of the waiver; (4) consideration for the

waiver; as well as (5) the totality of the circumstances.

If your company does intend to require prospective employees to waive their rights to sue over workplace disputes it is important to ensure that:

• the waiver is obvious and prominent;
• the employees have time to review the waiver before signing;
• the employees have time to consult with a lawyer before signing the waiver;
• the waiver is clear and easily understood; and

documentation and/or explanation of the company’s required resolution process must be provided to the employees at the time they sign the waiver.

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