Labor & Employment Developments Blog

Many employers include mandatory arbitration agreements as a standard part of onboarding, expecting that workplace disputes will be resolved outside of court.  A recent decision from the Sixth Circuit, however, underscores an important—and expansive—limitation on those agreements when sexual harassment is alleged.

On March 3, 2022, the President signed into law the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021. A product of the Me Too Movement, the new law allows individuals bringing sexual assault and sexual harassment claims who entered into predispute arbitration agreements or class- or collective-action waivers to reject those agreements and waivers and bring those claims in court and via a class or collective action. The law applies to any claims arising after the date of enactment. 

A common provision in employment agreements may no longer be enforceable, at least for employers in Kentucky.

Earlier today the Supreme Court announced its decision in Epic Systems Corp. v. Lewis, holding in a 5-4 split that arbitration agreements providing for individualized proceedings must be enforced. Arbitration provisions in employment contracts are quite common and often include language specifically limiting employees to individualized arbitration proceedings as opposed to class action proceedings or joint-arbitration.

The new term of the Supreme Court began last Monday, October 2, and the first case up has the potential to affect millions of employers and employees across the country. The case, Epic Systems Corp v. Lewis (which was consolidated with two other cases, Ernst & Young LLP v. Morris and National Labor Relations Board v. Murphy Oil USA) examines whether employment agreements requiring employers and employees to resolve employment-related disputes through individual arbitration and waive class and collective proceedings are enforceable under the Federal Arbitration Act (FAA), notwithstanding the provisions of the National Labor Relations Act (NLRA).

The Second Circuit’s decision to reinstate the NFL’s four game suspension of Tom Brady has been in the news this week. To those of us who handle arbitration on a regular basis, it came as no surprise. However, employers who arbitrate cases pursuant to a collective bargaining agreement, or who have or are considering arbitration programs, should not be overly concerned.   

Yesterday, the Supreme Court issued its long awaited decision in American Express v. Italian Colors Restaurant. 

In my last post, I discussed the pros and cons of arbitration of employment disputes, concluding that the pros outweigh the cons. I also noted that the Arbitration Fairness Act, which would ban forced arbitration in employment disputes, is looming on the horizon. I ended with the question: What should you do if the Arbitration Fairness Act passes? As promised, here are a few suggestions.

In the interest of full disclosure, I am a huge proponent of arbitration of employment disputes as beneficial to employers. Frankly, I do not understand why more employers do not use arbitration. After some internet research on the topic, I have identified the following commonly stated pros and cons of arbitration.

The United States Supreme Court heard oral arguments on Wednesday (12/9) in Stolt-Nielsen S.A. v. AnimalFeeds International Corp., an anti-trust case.  The case is of interest to employment law practitioners because the issue under consideration is whether class arbitration may be imposed when that issue is not addressed in the parties’ arbitration clauses.