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In hindsight, mutuality of obligation seems quaint. Probably because it's one the first concepts we learned in contract law. (Mutuality is to law school what "Twinkle, Twinkle Little Star" is to piano lessons.)
But according to California's Third Appellate District, mutuality still matters in employment agreements.
In Wisdom v. AccentCare, a California staffing agency included a clause in its employment application that stated, if hired, all disputes between the employee and the agency must be submitted to binding arbitration. In exchange for an employee's agreement to arbitrate, the employee received assurances that the agency with agree to submit claims and disputes against the employee to arbitration.
Several of AccentCare's employees developed a beef with the company, and later tried to sue. AccentCare responded with a motion to compel arbitration of the claims.
The trial court denied AccentCare's motion, finding that the agreement was procedurally and substantively unconscionable because:
The Third Appellate District affirmed the trial court's decision. Because in the employment application arbitration language did not create mutual obligations, and the circumstances surrounding the execution of the agreement were procedurally unconscionable, the binding arbitration agreement was unenforceable.
If you represent business owners in employment law issues, make sure your clients understand the need for mutuality of obligation before they end up holding void agreements in a California courtroom.
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.