dissenting:
Both parties agree that employees can be bound by an agreement to arbitrate employment discrimination claims (including claims under the ADA) if they knowingly agree to do so. This much follows from Prudential Insurance Co. v. Lai, 42 F.3d 1299 (9th Cir.1994), although Nelson does argue that employment contracts are exempt from coverage under the Federal Arbitration Act, 9 U.S.C. § 1. The majority opinion punts the coverage question, though it is unclear to me that it can be avoided since the arbitration provisions at issue in this case are in an Employee Handbook — not a securities registration application- — and are binding (if at all) because they are part of Nelson’s employment contract with Cyprus. Cf. Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 25 n. 2, 111 S.Ct. 1647, 1651 n. 2, 114 L.Ed.2d 26 (1991) (finding no need to address the scope of the § 1 exclusion as the arbitration clause being enforced was not in a contract of employment, but in Gilmer’s securities registration application).
In any event, Lai indicates that an employee may only be obliged to arbitrate statutory claims such as those arising under Title VII if he or she has “knowingly agreed” to submit such disputes to arbitration. 42 F.3d at 1304. Neither Lai’s U-4 form nor the U-4 manual described the types of disputes that were to be subject to arbitration, or referred to employment disputes. As there was no way that Lai could have understood that in signing the form, she was agreeing to arbitrate sexual discrimination suits, we held that Lai was not bound by any valid agreement to arbitrate employment discrimination claims. Id. at 1305.
Nelson’s case cannot be so easily resolved, because Cyprus’s Employee Handbook does specifically refer to arbitration of employment disputes including statutory claims and those arising under the equal employment opportunity laws.1 The question, therefore, is whether the Employee Handbook, which Nelson acknowledged receiving and agreed *764to read and understand before it became effective, is a valid agreement to arbitrate employment disputes, including Nelson’s ADA claim. Under Lai, this depends on whether Nelson “knowingly contracted] to forego [his] statutory remedies in favor of arbitration.” Id.
The answer to this question, in turn, must depend on Arizona employment contract law. As the Supreme Court instructed in First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995), “[w]hen deciding whether the parties decided to arbitrate a certain matter ... courts generally ... should apply ordinary state-law principles that govern the formation of contracts.” Id. at 944, 115 S.Ct. at 1924; see also Doctor’s Assocs., Inc. v. Casarotto, — U.S. -, -, 116 S.Ct. 1652, 1655, 134 L.Ed.2d 902 (1996) (noting that state law “concerning the validity, revocability, and enforceability of contracts” governs agreements to arbitrate); Patterson v. Tenet Healthcare, Inc., 113 F.3d 832, 833-34 (8th Cir.1997) (following First Options and interpreting arbitration agreement in light of state law); Webb v. Investacorp, Inc., 89 F.3d 252, 258 (5th Cir.1996) (same); Cogswell v. Merrill Lynch, Pierce, Fenner & Smith Inc., 78 F.3d 474, 478 (10th Cir.1996) (same); Doctor’s Assocs., Inc. v. Distajo, 66 F.3d 438, 452 (2d Cir.1995) (same).
The district court noted that Arizona law recognizes that an employee handbook may be incorporated into an employment contract. See, e.g., Leikvold v. Valley View Community Hosp., 141 Ariz. 544, 688 P.2d 170, 174 (1984) (en bane). It found that Nelson’s affidavit did not raise a genuine issue of fact regarding whether he knowingly and voluntarily contracted away his right to file a statutory discrimination claim in court, and concluded that Nelson was subject to the arbitration clause in the Employee Handbook.
Nelson, of course, contends that he did not knowingly and voluntarily enter into the arbitration clause, but he raises no issue on appeal, and doesn’t argue, that the district court’s conclusion was erroneous under Arizona law. For that reason, there is no need for us to go farther.
The majority opinion’s entire discussion about “knowing agreement,” supra at 8128-30, is thus dicta and, beyond that, without persuasive force as it is also entirely without citation to authority. I therefore dissent.
. It provides:
"The Open Door Policy and the Complaint Resolution Policy ... are the sole and exclusive procedures for the processing and resolution of any problem, controversy, complaint, misunderstanding or dispute that may arise concerning any aspect of your employment or termination of employment including any dispute arising out of or based upon any state or federal statute or law applicable to your employment ...” (Employee Handbook, p. 57).
"The Open Door Policy and Complaint Resolution Policy are the sole and exclusive procedures for the processing and resolution of any problem, controversy, complaint, misunderstanding or dispute between an employee and Cyprus Bagdad. This includes ... any claim that any stale or federal statute or law applicable to your employment has been violated.” (Employee Handbook, p. 10).
"The Complaint Resolution Policy is a somewhat more formal procedure [than the Open Door Policy] that includes a provision for arbitration in cases involving corrective action, discharge, or a claim that the Equal Employment Opportunity/Nonharassment Policy has been violated.” (Employee Handbook, p. 10).
"The arbitrator shall have authority to decide statutory issues, including those arising under the equal employment opportunity laws.” (Employee Handbook, p. 13).