No haunted house can scare general counsel as much as an opinion invalidating their company’s arbitration clause and thereby allowing a class action to proceed.  So, here is a Halloween tale for all to keep in mind.

Ralphs Grocery Company hired Zenia Chavarria to work in the deli of one of its grocery stores.  Ms. Chavarria’s employment application agreed that she would be bound by Ralphs’ arbitration policy, but Ralphs did not send her that arbitration policy until three weeks after she signed her application.  The arbitration policy included the following:

• a prohibition on using AAA or JAMS to administer the arbitration;
• a requirement that a single arbitrator decide the dispute, and the arbitrator must be a retired state or federal judge;
• a method of selecting the arbitrator that ensured that, unless the parties agreed on the arbitrator, the arbitrator would be chosen by the party who did not demand arbitration;
• a provision that each party must pay half of the arbitrator’s total expected fees at the outset of the proceeding; and
• a provision allowing Ralphs to unilaterally modify the arbitration policy without notice.

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