Federal Arbitration Act (FAA)

On June 6, 2022, a unanimous United States Supreme Court issued another key decision interpreting the Federal Arbitration Act (“FAA”) that will have a significant impact on certain employers going

Continue Reading United States Supreme Court Rules Certain Airline Employees Exempt From Federal Arbitration Act

As anticipated, on March 3, 2022, President Biden signed The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (H.R. 4445). The law takes effect immediately.

As explained in our prior blog, in a rare display of bipartisanship, on February 7, 2022, the House of Representatives overwhelmingly approved H.R. 4445 by a vote of 335 to 97. A few days later, on February 10, 2022, the Senate passed H.R. 4445, without amendment, by voice vote.

Continue Reading UPDATE: President Biden Signs Bipartisan Bill to End Mandatory Arbitration of Sexual Harassment and Assault Claims in the Workplace

In a rare display of bipartisanship, Congress recently passed a new law that is poised to eliminate pre-dispute mandatory arbitration of sexual harassment and sexual assault disputes.
Continue Reading Congress Passes Bipartisan Bill to End Mandatory Arbitration of Sexual Harassment and Assault Claims in the Workplace

A divided Ninth Circuit panel dealt a blow to California employers recently in holding that a state law prohibiting mandatory arbitration agreements is largely not preempted by the Federal Arbitration Act (“FAA”).  California employers often have employees enter into such mandatory arbitration agreements as a condition of employment.

Continue Reading Ninth Circuit Upholds in Part California’s Ban on Mandatory Arbitration

In Garcia v. Haralambos Beverage Co., the California Court of Appeal embraced the adage “time kills all deals” to conclude that an employer waived its right to arbitrate the wage-hour claims at issue in the case by, among other things, delaying two years to seek arbitration as a last resort and waiting to locate the plaintiffs’ signed arbitration agreements.  By waiving its right to arbitrate, the employer also lost its ability to strike class claims as a result.
Continue Reading Delaying Enforcement of Arbitration Agreements May Lead to Undesirable Consequences

The New Year brings new laws for Illinois employers. Some laws go into effect this Summer, while others are effective as of this month. For employers who have not yet revised handbooks, policies and agreements, the time is now. Below is a brief summary of the new laws.
Continue Reading The Time Is Now for Employers in Illinois to Abide by New Laws

On June 26, 2019, Southern District of New York Judge Denise Cote granted a motion to compel arbitration of a plaintiff’s sexual harassment claims finding that the New York State prohibition on mandatory arbitration of sexual harassment claims is preempted by the Federal Arbitration Act (“FAA”). As we mentioned in our blog upon this law’s enactment, the United States Supreme Court has routinely held that state laws expressly identifying a category of non-arbitrable state law claims are preempted by the FAA. In Latif v. Morgan Stanley & Co., the Southern District followed the Supreme Court and found the New York ban on mandatory arbitration of sexual harassment claims unenforceable.
Continue Reading Southern District of New York Invalidates State Ban on Mandatory Arbitration of Harassment and Discrimination

In a 2010 decision, Stolt-Nielsen S. A. v. Animalfeeds International Corp., the United States Supreme Court held that parties may not be compelled to submit to class arbitration under the Federal Arbitration Act (FAA) unless there is a contractual basis for concluding that they agreed to do so. The Court held that such an agreement could not be presumed from the fact that the arbitration agreement is “silent” on the issue of class arbitration or the mere fact that the parties agreed to arbitrate.
Continue Reading U.S. Supreme Court Upholds Individualized Arbitration Where Agreement Is Ambiguous on Issue of Class Arbitration

While arbitration as a form of alternative dispute resolution (“ADR”) has long had a presence in American jurisprudence, a recent Supreme Court decision —coupled with significant cultural trends —have left many employers and legislators wondering about the continued viability of mandatory pre-dispute arbitration for all employment disputes.

Is the FAIR Act Fundamentally Unfair to Employers?

On February 28, 2019, U.S. Representative Hank Johnson (D-GA) and U.S. Senator Richard Blumenthal (D-CT) introduced “The Forced Arbitration Injustice Repeal Act” (“FAIR Act”) which seeks to (1) prohibit pre-dispute arbitration agreements that force arbitration of future employment, consumer, antitrust, or civil rights disputes, and (2) prohibit agreements and practices that interfere with the rights of individuals, workers, and small businesses to participate in a joint, class, or collective action related to an employment, consumer, antitrust, or civil rights dispute.

The Senate bill is S. 610. It has 33 co-sponsors, all Democrats. It has been referred to the Senate Judiciary Committee, where it is unlikely to receive consideration. The House bill (H.R. 1423), on the other hand, has been referred to the House Judiciary Committee where it is likely to receive active consideration. It has 160 co-sponsors.
Continue Reading New Federal Legislation Seeks to Eliminate Mandatory Arbitration Agreements

On January 15, 2019, the Supreme Court issued its decision in New Prime Inc. v. Oliveira, where it decided independent contractor truck drivers cannot be forced into arbitration.  The Court’s decision is based on Federal Arbitration Act § 1, which excepts from coverage disputes involving “contracts of employment” with “workers engaged in foreign or interstate commerce.” 
Continue Reading SCOTUS Holds Independent Contractor Truck Drivers Exempt from Arbitration Under FAA

On January 8, 2019, the United States Supreme Court issued a unanimous opinion in Henry Schein, Inc. v. Archer & White Sales, Inc. strengthening the enforceability of arbitration “delegation clauses.” These clauses have been previously upheld by the U.S. Supreme Court and allow parties to agree that an arbitrator, rather than a court, will decide the threshold issue of whether a dispute must be arbitrated, as well as the merits of the dispute. The Supreme Court in Henry Schein rejected a doctrine adopted by several federal Circuit Courts of Appeals and the California Court of Appeal, which permitted courts to decline to enforce delegation clauses if the underlying assertion of arbitrability was “wholly groundless.” Under Henry Schein, courts must refer questions of arbitrability to the arbitrator when the parties have agreed to a clear and unmistakable delegation, even if the court believes the claim of arbitrability is frivolous.
Continue Reading U.S. Supreme Court Rejects ‘Wholly Groundless’ Exception to Delegation Clauses in Arbitration Agreements