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Showing 5 posts in Federal Arbitration Act.

NLRB Serves Up Guidance for Restaurants on Mandatory Arbitration Agreements in Post-Epic Systems Era

The National Labor Relations Board (NLRB) recently provided guidance in Cordúa Restaurants, Inc., 368 NLRB No. 43, for employers seeking to require employees to sign class action and collective action waivers in arbitration agreements when facing litigation. By way of background, the U.S. Supreme Court previously held in Epic Systems Corp. v. Lewis, 138 S.Ct. 1612 (2018), that agreements containing class action and collective action waivers, and provisions stipulating that employment disputes be resolved by individualized arbitration, do not violate the National Labor Relations Act. As a result, the Court held that these agreements must be enforced as written to follow the Federal Arbitration Act (the "Act"). In Cordúa Restaurants, the NLRB was faced with two issues of first impression in the post-Epic Systems era: (1) whether the Act prohibits employers from circulating such agreements in response to employees opting in to a collective action; and (2) whether the Act prohibits employers from threatening to discharge an employee who refuses to sign a mandatory arbitration agreement. The NLRB held that both actions were consistent with Epic Systems and were not forbidden under the Act. The Cordúa Restaurants decision provides significant opportunity for employers to revise arbitration agreements to preclude participation in these multi-party litigations and require that employees sign these agreements. More ›

SCOTUS Reverses Ninth Circuit, Finds Class Arbitration Must be Explicitly Authorized in Agreements

Last year, the U.S. Supreme Court (SCOTUS) handed employers a major win in Epic Systems v. Lewis, when it ruled that employees must submit claims to arbitration on an individualized basis when their employment agreements require it, even when those claims could be brought as class or collective action under federal legislation. More recently, in Lamps Plus Inc. et al. v. Frank Varela, SCOTUS addressed the issue of whether a worker can pursue class arbitration when an arbitration agreement does not explicitly address class arbitration. By a 5-4 vote, the court said class arbitration is also barred in such circumstances, holding that "[u]nder the Federal Arbitration Act, an ambiguous agreement cannot provide the necessary contractual basis for concluding that the parties agreed to submit to class arbitration[.]" More ›

U.S. Supreme Court Puts the Brakes on Mandatory Arbitration, Holds Transportation Workers Exempt from the Federal Arbitration Act

The United States Supreme Court recently handed workers a rare victory in New Prime Inc. v. Oliveira. The Supreme Court ruled that transportation workers engaged in interstate commerce—including those labeled as independent contractors—are exempt from the Federal Arbitration Act (FAA) and thus cannot be compelled to undergo mandatory arbitration.  As a result of this decision, employers in the transportation industry will have to review their existing arbitration policies and assess whether or not they comply with applicable local, state, and federal laws. More ›

California Senators Defy Federal Law by Making Employment-Based Arbitration Agreements Optional

On August 22, 2018, California senators passed a bill that prevents employers from forcing employees to sign mandatory arbitration or nondisclosure agreements in order to secure and/or maintain employment.  AB 3080 prevents retaliation against workers who choose not to sign mandatory arbitration agreements that would waive their right to pursue legal action under the state’s Fair Employment and Housing Act or the California Labor Code in courts.  The intent of the bill is not to outlaw arbitration agreements in their entirety, but to provide workers and job applicants with the option to choose the forum in which to air out their grievances. The proposed legislation will now move to the desk of Governor Brown for final approval.  More ›

SCOTUS Green Lights Class Action Waivers in Major Win for Employers

The United States Supreme Court ruled earlier this week that employees must submit claims to arbitration on an individualized basis when their employment agreements require it, even when those claims could be brought as class or collective action under federal legislation such as the Fair Labor Standards Act. Writing for the majority, Justice Neil Gorsuch held that parties to an arbitration agreement are bound by their agreement, as the Federal Arbitration Act envisioned. The Court cited the long history of supporting private arbitration agreements as an efficient and cost-effective means of handling disputes between parties, including parties to an employment agreement who have a dispute over wages. More ›

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