PwC Issues New Offers to New Hires, Now With Bonus Mandatory Arbitration

Remember back in March when we discussed PwC's recent attempt at corralling its staff into arbitration agreements? You'll recall a PwC spokesperson told us then it was "noncontroversial," which is code for "don't even worry about it, guys, companies do this all the time."

In this case, PwC told current staff that not agreeing to arbitration wasn't going to risk their jobs:

Please be assured that, should you decline the agreement, it will not adversely affect the terms or conditions of your employment with the firm.

The legality of that agreement aside, we have a new development in PwC's push for arbitration. This time, they're going after new hires and not offering an option to decline.

According to several new hires we spoke to, in the past few weeks, PwC has issued new offers to these recruits, who accepted offers last fall with start dates after July 1, 2014.

We compared an old and new offer side by side and found they were identical except for two things, one of which was huge.

First, the new offer included a mention of relocation assistance (no biggie). Second, it made two mentions of arbitration -- yes, that pesky arbitration they "offered" current staff.

Old:

12. Injunctive Relief. In the event of a breach or threatened breach by you of any provision of sections 7, 9 or 11 of this Employment Agreement, you agree that the Firm, in addition to any other legal and equitable remedies available to it, shall be entitled to provisional and injunctive relief. You further agree that no bond shall be required to be posted by the Firm in connection with any such action for provisional or injunctive relief. The Firm may pursue any remedy available to it (including, without limitation, those remedies set forth in section 11(b) above), concurrently or consecutively in any order, and the pursuit of one such remedy will not be deemed to be an election of remedies or waiver of the right to pursue any other remedy.

New:

12. Injunctive Relief. In the event of a breach or threatened breach by you of any provision of sections 7, 9, or 11 of this Employment Agreement, you agree that the Firm, in addition to any other legal and equitable remedies available to it, shall be entitled to provisional and injunctive relief from an appropriate forum, subject to the arbitration agreement attached hereto as Exhibit A. You further agree that no bond shall be required to be posted by the Firm in connection with any such application for provisional or injunctive relief. The Firm may pursue any remedy available to it (including, without limitation, those remedies set forth in section 11(b) above), concurrently or consecutively in any order, and the pursuit of one such remedy will not be deemed to be an election of remedies or waiver of the right to pursue any other remedy.

And then, this snazzy new item:

15. Dispute Resolution. You and the Firm agree, as a condition precedent to your employment, to be bound by the terms of the arbitration agreement attached hereto as Exhibit A, which is incorporated herein by reference, and which requires both you and the Firm to submit to final and binding arbitration all claims covered under the arbitration agreement.

I know what you're thinking. What is this Exhibit A of which we speak? Glad you asked, here you go:

PwC New Hire Arbitration Agreement

All new hires we spoke to basically said the same thing -- they signed offers already and were sent updated offers which included the arbitration agreement. Although no one said they were told "SIGN THIS OR ELSE!" but one source said that the email received "definitely [made it] seem mandatory."

Our original tipster asked:

Riddle me this, GC peeps, is THIS legal? Have we not already accepted offers? Wouldn't we need consideration from them to constitute adding new terms to our employment contracts?
Is this something we can have thrown out later because of the lack of consideration for employees who accepted but haven't started?

As with all things legal there are exceptions, but the short version is, "Of course it's legal!" PwC has a small battalion of lawyers working inside and outside the firm. Do you really think they'd be throwing around illegal employment agreements all willy nilly?

It's not unusual for companies to change conditions of employment, especially if you're not a current employee: 

Employers advance an offer letter outlining terms of employment. If the potential hire feels satisfied with the terms, she accepts the offer and its accompanying terms of employment. Offer letters aren’t the same thing as an employment contract, though, and employers can change the terms of employment, especially in an “at-will” position where employee or employer can terminate the agreement if it proves unsatisfactory.

[...]

Offer letters sometimes contain fine print that award additional privileges to employers, but employers could also add these items to the terms of employment after you’ve already accepted. Watch for the words “mandatory arbitration,” since agreeing to this means you won’t be able to go through the traditional court system to plead your case should you eventually want to make a case against your employer.

[...]

Employers can’t always change the terms of employment, but most applicable situations do not relate to new hires. For example, employers can’t change contract terms for workers on leave through the Family and Medical Leave Act, or FMLA. This piece of legislation protects an employee’s position, schedule and location while on leave. However, this wouldn’t apply to most new hires. Also, employers can’t change terms of employment in retaliation for employees who engage in protected behaviors such as whistle blowing or filing a discrimination claim, according to the Society for Human Resource Management.

 

 

Anyone out there a PwC new hire who received one of these updated offers and care to drop your $0.02? Do so in the comments as usual.

Comments