Arbitration Of Claims

Consistent with the terms of the arbitration agreement at issue, an hourly fuel tech and driver is entitled to arbitrate collective claims alleging that his employer violated the Fair Labor Standards Act (FLSA), the federal appeals court in New Orleans has ruled.  Sun Coast Resources Inc. v. Roy Conrad, No.

The U.S. Court of Appeals for the Seventh Circuit, in a case of first impression, has developed a required framework for a district court to evaluate when a plaintiff asks the Court to authorize notice to putative class members who have entered into arbitration agreements with their employer.

On December 30, 2019, a federal judge in the Eastern District of California entered an order temporarily halting the enforcement of AB 51, California’s new anti-mandatory arbitration law. AB 51, which was set to go into effect on January 1, 2020, makes it illegal for an employer to require an employee or applicant to waive the right to pursue a civil action as a condition of employment. While AB 51 does not directly reference arbitration, the clear purpose of the law is to halt the use of mandatory workplace arbitration agreements in California.

Although the Federal Arbitration Act (“FAA”) places arbitration agreements on the same footing as any other contract and generally precludes state laws banning mandatory arbitration, employers must ensure that their arbitration agreement are enforceable contracts – an issue governed by state law.

In Taylor v. Dolgencorp, LLC, an employer sought

The U.S. House of Representatives has passed the “Forced Arbitration Injustice Repeal Act” (FAIR Act), which aims to nullify mandatory, predispute arbitration agreements and class-action waivers for employment, consumer protection, antitrust, and civil rights matters.

A properly implemented employment arbitration program can provide a variety of benefits to employers and employees alike. Many employers have robust arbitration programs that require both the employer and its employees to arbitrate any covered claim either may have against the other. These arbitration programs also very often contain a class and collective action waiver, whereby employees who are part of the program agree not only to waive a jury trial in favor of arbitration but also to waive their right to proceed collectively in a class or collective action lawsuit against their employer. The United States Supreme Court has issued a series of opinions in recent years that leave no doubt as to the enforceability of employment arbitration agreements that contain class and collection action waivers. The result has been to provide employers with an important tool to stem the ever-increasing tide of class and collective employment-related litigation.

An agreement to arbitrate sexual harassment claims is enforceable pursuant to the Federal Arbitration Act (FAA), federal Judge Denise Cote has ruled, rejecting arguments that New York law voids such an agreement. Latif v. Morgan Stanley & Co. LLC, et al., No. 1:18-cv-11528 (S.D.N.Y. June 26, 2019).

Class action arbitration is such a departure from ordinary, bilateral arbitration of individual disputes that courts may compel class action arbitration only where the parties expressly declare their intention to be bound by such actions in their arbitration agreement, the U.S. Supreme Court has ruled in a 5-4 decision. Lamps Plus, Inc. v. Varela, No. 17-988 (Apr. 24, 2019). “Courts may not infer from an ambiguous agreement that parties have consented to arbitrate on a classwide basis,” held the Court.

In the last two weeks, the nation’s high court issued two opinions concerning an important issue relating to enforceability of arbitration agreements, namely, who decides the “gateway” issue of whether or not a particular dispute is arbitrable—a court or an arbitrator?

In New Prime, Inc. v. Oliveira, the U.S. Supreme Court held that the Federal Arbitration Act’s (FAA) Section 1 exemption applies to transportation workers, regardless of whether they are classified as independent contractors or employees. No. 17-340 (Jan. 15, 2019).

Executive Summary: In New Prime Inc. v. Oliveira, the U.S. Supreme Court held today that the Federal Arbitration Act’s (FAA) exclusion of certain “contracts of employment” from the Act’s coverage applies to transportation worker independent contractors. In its holding, the Court did not define who constitutes a transportation worker under the FAA.

On January 8, 2019, in a unanimous opinion written by Associate Justice Brett Kavanaugh, the Supreme Court ruled that where parties have agreed to delegate issues of arbitrability to an arbitrator, a court may not override that agreement. The Court explained this is true even where the court believes that a party’s argument that the dispute is within the scope of the agreement is frivolous. The Court’s decision ends a circuit split about whether, when faced with an enforceable delegation provision, courts could still hear arguments about the scope of an arbitration agreement under the “wholly groundless” exception.

Addressing a motion to compel arbitration and to dismiss a pending action, the United States District Court for South Carolina analyzed the enforceability of an arbitration clause in favor of a nonsignatory. Supporting its opinion with a legion of authority, the court found in favor of arbitration based largely upon the specific language of the arbitration agreement but also based upon the overall federal policy supporting arbitration. Devon Smith, individually and on behalf of all others similarly situated v. General Information Solutions, LLC, WL 2018 6528155 (December 11, 2018).

As recent Supreme Court decisions have surveyed and expanded the landscape of arbitration and arbitration agreements, employers have placed greater focus on whether arbitration is actually the right fit for their company.

A recent decision of the United States District Court of South Carolina again demonstrated a liberal federal policy favoring arbitration agreements. Suzanne Young v. AMISUB of South Carolina, Inc. d/b/a Piedmont Medical Center, 2018 WL 5668619 (November 1, 2018). While analyzed here in the context of an employment dispute, the guiding principles are equally applicable to other contexts.