Total Articles: 61
U.S. Supreme Court Again Confirms Viability of Arbitration Agreements
Continuing its growing line of cases in favor of enforcing arbitration agreements, the U.S. Supreme Court has upheld an arbitration agreement containing a class action waiver and requiring the arbitration of consumer claims brought under the Credit Repair Organizations Act (“CROA”). The Court ruled that because the CROA was silent on whether statutory claims had to be litigated in court (despite the CROA’s requirement that consumers be informed of their “right to sue”), the Federal Arbitration Act required that the parties’ arbitration agreement be enforced, “according to [the agreement’s] terms,” including its class action waiver. CompuCredit Corp. v. Greenwood, No. 10-948 (Jan. 10, 2012).
SEC Rule Proposes to Preclude Certain Collective Action Claims under FINRA Arbitration Rules
Executive Summary: The Securities and Exchange Commission (SEC) has published a proposed rule applicable to arbitrations conducted by the Financial Industry Regulatory Authority, Inc. (FINRA). See 77 Fed. Reg. 1773. The rule would preclude collective action claims by employees of FINRA members brought under the Fair Labor Standards Act, the Age Discrimination in Employment Act or the Equal Pay Act of 1963 from being arbitrated in a FINRA forum.
FINRA Proposal on Predispute Agreements to Arbitrate Whistleblower Claims
The Financial Industry Regulatory Authority (FINRA), the largest independent non-profit regulator for all securities firms engaged in business in the U.S., has proposed a long-awaited rule change intended to align its arbitration rules with the Dodd-Frank Consumer Reform and Wall Street Protection Act of 2010, Pub. L. No. 111-203, § 919 (2010) ("Dodd-Frank"), which invalidated predispute agreements to arbitrate certain whistleblower claims. The rule change would amend FINRA Rule 13200 of the Code of Arbitration Procedure for Industry Disputes, which presently mandates predispute arbitration of employment disputes (except statutory discrimination claims) between registered securities representatives and their employers.
Two And A Half Lawsuits: Lessons Learned From The Charlie Sheen Litigation
The recent termination of Charlie Sheen from "Two and a Half Men," and the swirl of negative publicity around the incident, has shed light on the use of arbitration agreements. After he was fired, Sheen filed a $100 million lawsuit against Warner Bros. He wants the proceedings held in front of a jury rather than being privately adjudicated by an arbitrator as outlined in his Warner Bros. contract.
Ban on Mandatory Predispute Arbitration Again Proposed in Congress
The so-called Arbitration Fairness Act (S. 987, H.R. 2873) has been re-introduced in Congress. It would amend the Federal Arbitration Act by banning mandatory, predispute arbitration agreements in employment, consumer, and civil rights matters. Under the bills, workers and consumers may consent to arbitration only after a dispute arises.
EMPLOYMENT ARBITRATION MAKES A COMEBACK
Unless Congress acts to overturn the United States Supreme Court's decision in AT&T Mobility LLC v. Concepcion, ____ DJDAR ____ (Apr. 27, 2011), employers with properly drafted arbitration agreements can cross employment law class actions off their lists of things to worry about. The California Supreme Court largely prohibited employers (and anyone else) from excluding class-based claims from arbitration agreements. But Concepcion and the U.S. Supreme Court's decision last Term in Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. ____ (2010), hold that the Federal Arbitration Act preempts California case law, and permits employers to require employees to forego the right to arbitrate on behalf of a class.
Legislative Override of Supreme Court
What a difference three years makes. Unlike the opening weeks of the prior Congress when it could not act fast enough to get the reversal of the Supreme Court's decision in the Lilly Ledbetter case to President Obama's desk, the offering of the Arbitration Fairness Act by Senator Franken, faces much more difficult sledding. Franken bill would block mandatory arbitration clauses in cell phone contracts.
U.S. SUPREME COURT APPROVES CLASS ACTION WAIVERS
Last week, the United States Supreme Court issued a landmark arbitration ruling involving consumer arbitration agreements which is likely to have wide applicability in the employment setting as well.
Supreme Court Finds FAA Preempts State Law Prohibiting Class Action Waivers in Arbitration Agreements
This article is a continuation of Ford & Harrison LLP's focus on the use of arbitration agreements to protect employers from collective/class-action exposure under the Fair Labor Standards Act.
Supreme Court Validates Class Action Waiver Provisions in Arbitration Agreements
In our April 2010 issue of Labor and Employment
Law, we discussed using mandatory arbitration
agreements as one option for combating the
proliferation of wage and hour class action litigation.
Under these agreements, an employee is required
to waive the right to bring or participate in any
collective or class action lawsuit. In addition, such
agreements often prohibit arbitration of class
claims. Arbitration agreements can be equally
effective in requiring arbitration on an individual
basis of all types of employment-related claims.
However, as we explained in our April 2010
newsletter, the enforceability of these agreements
has been controversial and has been denied in
some jurisdictions on “unconscionability” and
public policy grounds.
Mandatory Arbitration Clauses that Prohibit Classwide Arbitration Held Enforceable Under Federal Arbitration Act
Last Wednesday, the United States Supreme Court held in AT&T Mobility LLC vs. Concepcion that the Federal Arbitration Act ("FAA") permits companies to require customers to arbitrate their complaints individually, precluding class action claims. Specifically, the Court held that the FAA prohibits state laws that condition the enforceability of certain arbitration agreements on the availability of classwide arbitration procedures. Consequently, companies can now require consumers to arbitrate any and all disputes and prevent the disputes from being decided on a classwide basis in arbitration.
Employers Should Consider Waivers Of Class Claims In Light Of Supreme Court Decision
In AT&T Mobility LLC v. Concepcion, a 5-4 Supreme Court struck down this week California's policy of prohibiting waivers of class claims in consumer arbitration agreements. The Court held that California's so-called "Discover Bank rule" conflicted with the Federal Arbitration Act. The AT&T decision is yet another statement of the strong federal policy favoring arbitration of disputes and may provide support to employers who want to include class waivers in employment agreements.
Arbitration Can Save Time and Money
s American businesses slowly emerge from the worst downturn since the Great Depression, employers should steer clear of roadblocks that can undermine their progress.
California Supreme Court Holds Arbitration Agreements May Not Waive Employees' Right to an Administrative Hearing
California courts will no longer enforce arbitration agreements to the extent that they require employees to waive the option of an administrative hearing (known as a "Berman" hearing) before the California Labor Commissioner. In an important opinion on February 24, 2011, the California Supreme Court ruled in Sonic-Calabasas A, Inc. v. Moreno that a Berman waiver in an arbitration agreement is "contrary to public policy and unconscionable."
Divided Supreme Court Endorses Use of Class Arbitration Waivers
On April 27, 2011, a divided U.S. Supreme Court held that the Federal Arbitration Act (FAA) protects an employer’s right to include a class action waiver in its arbitration agreement even though a state law bars such provisions as unconscionable. In a 5-4 decision, the Court found that “[s]tates cannot require a procedure that is inconsistent with the FAA, even if it is desirable for unrelated reasons.”
Second Circuit Addresses Class-Action Waivers in Arbitration Agreements after Supreme Court's Stolt-Nielsen Decision
In March 8, 2011, the Second Circuit issued In re American Express Merchants' Litigation, ("Amex") regarding the enforceability of a class-action waiver, specifically in light of the Supreme Court's Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 130 S. Ct. 1758 (2010). Previously, in Stolt-Nielsen, the Supreme Court reversed the Second Circuit on the issue of whether silence in an arbitration agreement would allow parties to arbitrate on a class basis. Although the Court in Amex ultimately held that the class-action waiver was not enforceable, the basis of the Court's decision likely would not apply to a class-action waiver in the context of the Fair Labor Standards Act. (A copy of the decision is available by clicking here or on the Second Circuit's web site at: http://www.ca2.uscourts.gov/decisions.)
Federal District Court Rules Unsigned Arbitration Agreement with Class-Action Waiver is Enforceable
Granting an employers motion to compel arbitration, a California federal court has held a class-action waiver did not render an arbitration agreement unenforceable, even though the employee did not sign the actual arbitration agreement, only other documents referencing it. Borrero v. The Travelers Indem. Co., No. CIV S-10-322 KJM (E.D. Cal. Oct. 14, 2010). The court ordered the employee to arbitrate her claims for alleged unpaid overtime and other violations of the California Labor Code.
Court of Appeal Moves the Arbitration Goal Posts Again
One of the frustrations with employment arbitration is that the courts continue to invent new ways of invalidating them. Employers who favor arbitration are stuck with re-issuing agreements with each new court decision.
Arbitration: The Trial with No Appeal?
Including an arbitration provision in your contract can be a big cost saver in certain situations where going to court and proceeding through an all-out trial would be more expensive. Arbitration is private and the case pleadings are not part of a public record, as litigation records are. Whether you win, lose or draw in arbitration, the decision of the arbitrator is final and there is no meaningful basis for appeal. Or is there a possibility that the losing party could attempt to have a court vacate the decision of the arbitrator?
SUPREME COURT CONTINUES TO GREENLIGHT EMPLOYMENT ARBITRATION (pdf).
The U.S. Supreme Court continues to issue rulings favorable to arbitration agreements
in the employment setting. Employers who have arbitration agreements with their
employees, or those considering putting such agreements in place, should make sure
their agreements are drafted and updated to take full advantage of developing Supreme
Court precedent. The two most recent Supreme Court decisions and their implications
for employers are addressed below.
U.S. Supreme Court Tackles Arbitration Case.
On June 21, with Justice Antonin Scalia writing for a 5-4 majority, the U.S. Supreme Court issued an important decision for employers that are utilizing or are considering adopting arbitration agreements. The Court addressed the enforceability of an arbitration agreement (included as part of an employment contract), which stated that the arbitrator determines the enforceability of the contract. According to the majority, because the employee in this case challenged his employment contract as a whole, rather than specifically chal-lenging the provision in the agreement granting the arbitrator the authority to determine enforceability (the "delegation provision"), the agreement to arbitrate must be evaluated by the arbitrator, not a court.
U.S. Supreme Court Strengthens Employer Arbitration Rights Meanwhile, Congress Seeks To Prohibit Such Agreements.
Some employers enter into arbitration agreements with employees as an alternative to dispute resolution in a court of law. In the event of a legal dispute, the matter is submitted to an arbitrator (often a retired judge) rather than to a judge or jury in state or federal court. However, over the years courts have scrutinized the terms of arbitration agreements, sometimes finding certain terms to be too unfair to the employee. Formulating enforceable terms of an employer-employee arbitration agreementthat is, an agreement that the courts will agree to upholdhas been very challenging.
The Potential Impact of Today's Supreme Court's 5-4 Decision on Arbitrability.
It is never too much a surprise when the Supreme Court reverses the 9th Circuit, nor in recent years is it a surprise when the Court hands down a decision favoring arbitration of disputes, even in employment law matters. In a narrow sense, that is the substance of today's 5-4 decision in Rent-A-Center, West, Inc. v. Jackson, (S.Ct. 6/21/10) [pdf].
Employers Handed Narrow Arbitration Decision Victory.
In a narrow 5-4 decision, the Supreme Court handed employers yet another victory in the area of employment arbitration agreements today by holding that, in many circumstances, the issue of whether the agreement is enforceable should be made by an arbitrator and not a court of law.
Supreme Court Holds that Arbitrator, not Court, Should Decide Issue of Unconscionability.
The U.S. Supreme Court has just issued a decision holding that under the Federal Arbitration Act (FAA) an arbitrator, not a court, should decide whether an arbitration agreement is unconscionable when the parties have delegated the determination of that issue to the arbitrator. See Rent-A-Center West v. Jackson (June 21, 2010). The Court's decision overturns that of the Ninth Circuit, which held that the court has exclusive jurisdiction to determine the issue of unconscionability, even though the parties' arbitration agreement gave the arbitrator that authority.
ENFORCEABILITY OF ARBITRATION AGREEMENTS IN FLUX.
Although it has been around since at least the 1600s, arbitration has grabbed headlines recently. Debate over arbitration is nothing new. In 1925, Congress enacted the Federal Arbitration Act (FAA) [t]o overcome judicial resistance to arbitration, and to declare a national policy favoring arbitration of claims that parties contract to settle in that manner. Under the FAA, all arbitration agreements in contracts involving commerce are valid, irrevocable, and enforceable.
High Court Says Arbitrators Cannot Decide Class Claims Unless Arbitration Agreement Specifically Says So Does this Apply to Employment Claims?
In Stolt-Nielsen S.A. v. AnimalFeeds International Corp., the Supreme Court ruled that arbitrators cannot decide class action styled arbitration claims unless an arbitration agreement specifically provides for it. But the Courts ruling may not become the boon that it seems for employers. An argument can be made that the decision does not apply in the context of employment claims because the National Labor Relations Act (NLRA) gives employees the right to engage in concerted activities for the purpose of mutual aid or protection. Employers that interfere with those rights commit unfair labor practices. So, theory being, employers that impose arbitration on employeesbut at the same time prohibit them from banding together to arbitrate their claimsunlawfully interfere with employees rights protected the NLRA.
The Supreme Court Giveth and The Ninth Circuit Taketh Away: Recent Arbitration Rulings Incent Employers to Review Their Agreements.
On April 27, 2010, the United States Supreme Court decided Stolt-Nielsen S. A., et al. v. AnimalFeeds Int'l Corp., No. 08-1198 (2010), which delivers good news to employers that require their employees to sign arbitration agreements. While not an employment case, Stolt-Nielsen holds that the Federal Arbitration Act prohibits parties from being forced to arbitrate class claims against their will. Here, because the parties' arbitration agreement in their contract was silent as to whether they were agreeing to arbitrate class claims, the Court held that, as a matter of contract law, it was improper to infer that the parties' intent was otherwise. Notably, the dissent wanted the opinion to be limited to arbitration agreements negotiated between sophisticated parties, as was the case between the businesses in the case. Although this limitation was not adopted by the majority, employers should be aware that plaintiff's lawyers trying to arbitrate employment class or collective actions in a similar context may seek to distinguish this case as on the ground that employment disputes typically involve parties with unequal bargaining power. Accordingly, employers would be wise to plainly disallow class or collective claims in their arbitration agreements.
Supreme Court Holds that Parties Who Have not Agreed to Class Arbitration Cannot be Required to Submit to Class Arbitration.
On April 27, the United States Supreme Court published its decision in Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., No. 08-1198, an antitrust case that could have far-reaching implications with respect to class arbitration. (A copy of the Court's slip opinion is available here.) In a 53 decision, the Court held that parties who had never agreed on the issue of whether to allow class arbitration under the arbitration agreement between them and whose arbitration agreement made no mention whatsoever of class arbitration could not be required to submit to class arbitration under the agreement. In so holding, the Court ruled that "a party may not be compelled under the [Federal Arbitration Act] to submit to class arbitration unless there is a contractual basis for concluding that the party agreed to do so."
Sixth Circuit Overturns Employer's Litigation Waiver for Lack of Detail.
On April 26, 2010, the United States Court of Appeals for the Sixth Circuit, which encompasses Kentucky, Michigan, Ohio and Tennessee, ruled that companies that require their employees to grieve or arbitrate their employment claims must provide them with sufficient information at the time of their acceptance to constitute a "knowing and intelligent" waiver.
Supreme Court Rules Against Inference of Class Arbitration in Silent Contracts.
On April 27, with Justice Samuel Alito writing for the 5-3 majority (Justice Sonia Sotomayor abstained), the U.S. Supreme Court addressed class-action arbitration when the parties agreement was silent regarding the aggregation of multiple parties claims. According to the Court, the arbitration panels imposition of class arbitration despite the parties stipulation that they had not reached an agreement on this issue is fundamentally at war with the Federal Arbitration Act (FAA) principle that arbitration is a matter of consent. [A]n implicit agreement to authorize class action arbitration, the Court ruled, is not a term that the arbitrator may infer solely from the fact of an agreement to arbitrate.
Supreme Court Rules Class Arbitration Not Allowed When Agreement is Silent.
On April 27, 2010 the U.S. Supreme Court decided that class arbitration is permissible only when the parties to a contract specifically agree. That is, silence does not amount to an implicit agreement to class arbitration. This question had confounded courts and arbitrators for years.
No Class Arbitration Under the FAA Unless Specifically Agreed, At Least for Now.
Today the Supreme Court decided a case important in the employment law field although the underlying case was a commercial dispute. The question in Stolt-Nielsen v. AnimalFeeds International (S.Ct. 4.27.10) [pdf] was whether under the Federal Arbitration Act, arbitrators could decide that class action was appropriate if the arbitration agreement was silent on that issue. Holding that the answer was no, Justice Alito wrote:
New Defense Appropriations Bill Invalidating Arbitration Agreements May Cause Defense Contractors Unexpected Litigation Costs.
Signed into law on December 19, 2009, the Department of Defense Appropriations Act (the "Act") has potentially broad and sweeping ramifications for defense contractors. Buried within this $636 billion spending measure is a clause prohibiting contractors and subcontractors that receive over $1 million in funds from the Department of Defense ("DOD") and certain subcontractors from requiring their employees and independent contractors to enter into arbitration agreements mandating the arbitration of claims arising under Title VII of the Civil Rights Act of 1964 ("Title VII") and common law tort claims relating to sexual assault or harassment.
U.S. Supreme Court Lets Stand Decision of California State Court Refusing to Enforce Arbitration Agreement Containing Class Waiver Provision.
The U.S. Supreme Court has refused to review the decision of the California Court of Appeals in Athens Disposal Co. v. Franco, which held that an arbitration agreement between a trash company and a driver that included a waiver of class claims and prohibited the employee from seeking civil penalties on behalf of other workers was unconscionable and so tainted with illegality that it was unenforceable.
Federal Defense Contractors Cannot Require Arbitration of Discrimination Claims.
The Department of Defense Appropriations Act of 2010 (the "Act"), enacted on December 19, 2009, does more than dole out funds to the Department of Defense (DOD). Of particular note to federal contractors, the Act restricts DOD contractors with qualifying contracts from requiring their employees, as a condition of employment, to arbitrate claims brought under Title VII of the Civil Rights Act of 1964 and torts "related to or arising out of sexual assault or harassment."
Arbitration Restricted For Defense Contractors And Subcontractors.
On December 19, 2009, President Obama signed into law a new Defense Appropriations Act. The Act contains a provision, originally introduced by Senators Al Franken of Minnesota and Mary Landrieu of Louisiana, with important implications for federal defense contractors and subcontractors that have implemented arbitration agreements for their employees. Specifically, the Act prohibits the federal government from awarding funds appropriated by the Act for any federal contract in excess of $1,000,000 if a contractor requires its employees or the employees of an independent contractor to arbitrate certain claims.
The Next Lilly Ledbetter Fair Pay Act?
The first bill signed into law within days following President Barack Obama's inauguration was the Lilly Ledbetter Fair Pay Act. This law extended the statute of limitations for filing charges of discrimination in compensation beyond the statutory 180/300 days from the alleged discriminatory act by making each new pay check a separate violation triggering a new period of charge filing (even if it was decades after the act in question). The law reversed the U.S. Su-preme Court's 5-4 decision in Lilly Ledbetter v. Goodyear Tire & Rubber Co. It was passed without congressional hearings or even a mark-up in a congressional committee.
Supreme Court Bypasses Constitutional Question In Arbitration Ruling.
On December 8, 2009, the U.S. Supreme Court issued a unanimous decision holding that a panel of the National Railroad Adjustment Board (NRAB) violated the Railway Labor Act (RLA) when it refused to hear five grievance cases on the ground that the railroad and the union had not presented sufficient evidence to show that they had completed the required "conferencing" before arbitration.
Is It Time For You To Adopt An Arbitration Policy?
When you fire an employee, there is always the concern that your termination decision will end up under the microscope of litigation the human resources equivalent of Monday-morning quarterbacking. But instead of having that employment dispute resolved in a courtroom, you may want to consider adopting an arbitration policy that substitutes an arbitration hearing for a courtroom trial.
U.S. Supreme Court Set To Begin New Term Justices To Review Arbitration And Disparate Impact Bias Cases.
In early October, the U.S. Supreme Court began hearing oral arguments in the 2009-2010 term. There are currently seven cases on the docket that involve employment and labor related issues or are likely to impact these areas. One of the most notable of these will decide how much time plaintiffs have to file a lawsuit when they believe they have been unfairly penalized by hiring tests. Other cases will resolve issues involv-ing an alleged whistleblower, pension benefits, race discrimination, and labor arbitration.
WHEN ARE ARBITRATION AGREEMENTS ENFORCEABLE?: WHEN IN ROMAN.
Federal and state legislation establish a public policy encouraging the use of arbitration agreements to resolve disputes. However, many employers have seen their agreements invalidated since the California Supreme Courts 2000 decision in Armendariz v. Foundation Health Psychcare, Inc. In that case, the Court imposed several procedural requirements for employment arbitration agreements. Recent appellate decisions have relied on those requirements to refuse to enforce employers existing arbitration agreements.
Arbitration Decision Is Either No Big Deal, or a Great Employer Victory.
The Supreme Court recently held, 5-4, that employees with age discrimination claims could be compelled to arbitrate their claims pursuant to provisions in collective bargaining agreements. The decision, 14 Penn Plaza v. Pyett, may not have a dramatic effect on Unionized employers because on its face it applies only to agreements that give the arbitrator authority to adjudicate such claims.
Legislation Prohibiting Employment-Related Predispute Arbitration Agreements Introduced in Congress
Legislation has been introduced in Congress that would make predispute arbitration agreements in employment, consumer, and franchise disputes and disputes arising under civil rights statutes unenforceable. The legislation does not apply to arbitration provisions in collective bargaining agreements.
Hotel's "Refusal" to Arbitrate Does Not Breach Arbitration Agreement.
Employers with currently valid arbitration agreements should keep in mind that nothing lasts forever. Just as the world is constantly changing, so too are court decisions relating to implementation and enforcement of arbitration agreements always evolving. The case at issue involves the U.S. Court of Appeals for the Ninth Circuit, which covers ten states in the western United States. But circuits read each others' cases and the principles established by one are frequently applied elsewhere. This case points up the need to always be aware of any binding arbitration agreements and their details when dealing with employee issues.
Mandatory Arbitration of Employment Disputes: Is It Right For Your Company? (pdf).
On March 25, 2008, the U.S. Supreme Court ruled in Hall Street Assocs. LLC v. Mattel, Inc. that courts must confirm an arbitration award unless that award is vacated, modified, or corrected on the basis of some very narrow and exclusive categories. The Court further held that the parties to an arbitration agreement could not contractually agree to modify a reviewing courts authority to vacate or modify the arbitration award. While this case emphasized the limited grounds for reversal and review under the Federal Arbitration Act (FAA), it also underscored the potential advantages of arbitration of disputes in
contrast to civil litigation for employers.
Careful What You Ask For... (4th Cir.)
A recent Fourth Circuit case highlights potential pitfalls with class and collective action arbitrations. In Long John Silvers Restaurants, Inc. v. Cole, et al., 514 F.3d 345 (4th Cir. 2008), the court affirmed an arbitrators award determining (i) the Fair Labor Standards Acts (FLSA) opt-in collective action certification process was inapplicable to the arbitration proceedings, and (ii) employees could pursue an opt out class action. The award magnified the scope of the case by including all employees who fell within the definition of the putative class, not just those who filed consents to join the action.
Supreme Court Reaffirms Limited Judicial Review of Arbitration Decisions Under FAA.
The U.S. Supreme Court recently issued a decision reaffirming the limited grounds for judicial review of an arbitrators decision under the Federal Arbitration Act (FAA). See Hall Street Associates, L.L.C. v. Mattel, Inc. (March 25, 2008). Although Hall Street is not an employment case, the Courts decision is relevant to employers because its reaffirmation of the limited grounds for judicial review of an arbitration award applies to awards issued by arbitrators in employment-related matters.
Supreme Court Holds that FAA Overrides Conflicting State Law Jurisdictional Provision.
Citing the national policy favoring arbitration established in the Federal Arbitration Act (FAA) and Southland Corp. v. Keating, the U.S. Supreme Court has ruled that the contractual agreement to arbitrate disputes preempts contrary state law frameworks. Writing for the Court in Preston v. Ferrer, decided on February 20, 2008, Justice Ginsberg held that the FAA overrides state laws that would lodge primary jurisdiction in another forum beside arbitration, regardless of whether that forum is judicial or administrative.
Arbitration Agreements: Make Sure Your Employees Actually Sign Them.
Many employers utilize binding arbitration to resolve employment-related disputes with their employees. The advantages of binding arbitration include savings of time and cost, limited discovery, a more expedited process than court procedures, and, hopefully, smaller attorney's fees.
Ninth Circuit Rules That Law Firms Dispute Resolution Program Is Unconscionable.
In yet another decision explaining what is, and is not, acceptable in employment-related mandatory arbitration procedures, the Ninth Circuit held that the program utilized by law firm OMelveny & Myers (OMM) was both procedurally and substantively unconscionable.
NLRB Finds Mandatory Arbitration Agreement Illegal.
The National Labor Relations Board (NLRB) has held that a union-free employer committed an unfair labor practice in violation of the National Labor Relations Act (NLRA) by maintaining a mandatory arbitration policy as a condition of employment because that policy could inhibit employees from filing charges with the Board. See U-Haul Co. of California, Case 32-CA-20665-1, 347 NLRB 34 (June 8, 2006).
Legal Alert: Fifth Circuit Finds USERRA Claims Subject to Arbitration.
The Fifth U.S. Circuit Court of Appeals has held that claims under the Uniformed Services Employment and Reemployment Rights Act (USERRA) are subject to arbitration in accordance with employment-related individual arbitration agreements.
Cost Provisions May Jeopardize the Enforceability of Agreements to Arbitrate Employment Disputes (pdf).
It is established law that an agreement between employer
and employee to arbitrate employment disputes, including
discrimination claims, is enforceable and precludes state
or federal court litigation of such disputes.
Use of AAA Rules for Selecting Arbitrator in Lieu of Unenforceable Selection Clause Upheld.
The Sixth U.S. Circuit Court of Appeals recently upheld a trial court's order to use the American Arbitration Association's (AAA) rules for selecting an arbitrator after severing an unenforceable arbitrator selection clause from an employment related arbitration agreement. See McMullen v. Meijer, Inc. (Jan. 13, 2006). In this case, the employee challenged the arbitrator selection clause because it permitted the employer to chose a panel of arbitrators from which the parties would select an individual to arbitrate the employee's termination. In 2004, the Sixth Circuit held that this clause was unenforceable and remanded the case to the trial court to determine whether the clause could be severed from the arbitration agreement.
A Marriage Made In Heaven, Modified On Earth, And Stuck In Purgatory.
Employment relationships, like marriages, don't always work out. At the beginning of any relationship, we always hope for the best, but often have to prepare for the worst. Like a prenuptial agreement for the betrothed, an arbitration agreement is one way an employer and applicant can plan for future disputes. Many employers consider arbitration an easy, cost-effective, private way to bring an end to what has become an unproductive employment union. However, if you don't cross your t's and dot your i's when putting the agreement in writing, a discharge can become just as ugly as a divorce.
The Scope of Judicial Review of Arbitration Awards [PDF File].
If recent reported decisions are any guide, parties to arbitration agreements do not always find appropriate the standards used by federal courts to review arbitral awards.
Arbitration Agreement Is Not Enforceable.
An arbitration agreement was found unenforceable by the Ninth Circuit because its fee and discovery provisions and its limitations on what issues could be arbitrated rendered the agreement procedurally and substantively unconscionable.
Requiring Workers to Arbitrate May Not Always Be Employers' Best Option.
Given the outcome of recent court decisions, there is ample reason for employers to question whether arbitration is in fact a preferable forum.
Circuit City's Arbitration Agreement Is Unenforceable.
Discusses Circuit City Stores, Inc. v. Adams, No. 98-15992 (9th Cir. February 4, 2002), in which the Ninth Circuit (on remand from the Supreme Court) held that the arbitration agreement in question was procedurally unconscionable because it was a contract of adhesion.
arbitration of employment claims: here to stay.
Discusses arbitration of employment disputes in light of Circuit City Stores, Inc. v. Adams, No. 991379, __ U.S. __ (March 21, 2001), in which the court held the Federal Arbitration Act ("FAA"), 9 U.S.C. 1, permits employers to require employees to arbitrate work-related disputes.
