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Arbitration

Brakes On? SCOTUS Rules on Arbitration Agreements in Employment and Transportation Contracts

Just when we thought “full steam ahead” for arbitration clauses in employment contracts, stemming from the U.S. Supreme Court’s loyal adherence to the Federal Arbitration Act (“FAA”) in Epic Systems Corp. v. Lewis, the brakes seem to have slammed on again. In January, the Supreme Court held in New Prime v. Oliveira, that the FAA does have some limitations. The earlier Epic Systems decision was seen by many as a business-friendly ruling, giving employers even greater ability to enforce arbitration agreements with their employees.

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Breaking Decision: U.S. Supreme Court Affirms that Independent Contractor Drivers May Not Be Forced to Arbitrate Disputes

If your driver agreements contain a requirement to arbitrate disputes, as of last week, that provision is no longer enforceable, according to the U.S. Supreme Court.

On January 15, 2019, the Supreme Court ruled unanimously 8-0 in the case of New Prime Inc. v. Oliveira that a contractual agreement to arbitrate disputes, often found in independent contractor agreements, is exempted from enforcement under the Federal Arbitration Act (“FAA”). New Prime, Inc. v. Oliveira, 528 U.S. __, 2019 WL 189342 (Jan. 15, 2019).

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Time to Update Contracts: New Laws Protect Employers – But You Have to Take Action

It’s the moment you dread: A document marked LAWSUIT arrives at your desk. An employee has sued the company in court claiming sexual harassment or maybe failure to pay overtime wages. The lawsuit even includes threats of class action.

The U.S. Supreme Court has now issued a business-friendly ruling that gives employers the freedom to work out problems privately. It ruled that companies may include in their employment contracts provisions that limit aggressive and costly lawsuits—including class action lawsuits.

Savvy companies, including big-time accounting firm Ernst & Young, use simple arbitration agreements in their employment contracts. These arbitration agreements prohibit employees from banding together and running to court to assert federal labor law violations. Rather, the agreements require that employees—current and former—engage in a private, low-cost arbitration process on an individual basis.

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The information contained in this website is provided for informational purposes only, and should not be construed as legal advice.

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