Many employers have implemented mandatory arbitration programs to resolve disputes with employees. When sued by an employee, an employer with a mandatory arbitration provision occasionally delays seeking an order compelling the lawsuit into arbitration. When a delay occurs, the party seeking to keep the case in court (usually the employee), may resist arbitration arguing that
Federal Arbitration Act Amended to Preclude Mandatory, Predispute Arbitration Agreements of Sexual Assault, Harassment Disputes
On March 3, 2022, the President signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (“Act”). The new law amends the Federal Arbitration Act to prohibit the enforceability of mandatory, predispute arbitration agreements and class action waivers of sexual assault and sexual harassment disputes. The passage of the law comes
Employers Using On-line Acknowledgments to Enter Arbitration Agreements May Face Problems of Proof
Texas law favors the resolution of disputes using alternative dispute resolution mechanisms such as arbitration. To compel an employee’s claim to arbitration, the employer need only show that a valid agreement to arbitrate exists and the claims asserted by the employee fall within the scope of the agreement. Many companies utilize technology such as online
Expect a Showdown at the Supreme Court over Class Action Waivers in the Employment Context
Arbitration agreements containing class action waivers can be an effective way for employers to mitigate risk against defending large scale mass actions filed by employees. And in the Fifth Circuit, the federal Court of Appeals covering Texas, and three other federal circuits, individual arbitration agreement containing class-action waivers are enforceable.
In a recent Seventh Circuit
Fifth Circuit Refuses to Enforce Illusory Handbook Arbitration Provision
It’s a rare day when a Texas state court or federal court sitting in Texas refuses to enforce an arbitration agreement. The Texas law is well-developed on this issue and the table is heavily tilted in favor of arbitration. Consequently, most employer arbitration programs in Texas are enforced. However, a recent opinion from the Fifth
Fifth Circuit Rejects Argument that Class Action Waivers in Arbitration Agreements Violate the NLRA
I first wrote about the NLRB’s decision that pre-dispute arbitration agreements waiving the right to assert claims as part of a class action violated federal labor law in January 2012 (post). Back then, I thought it was prudent for employers to wait for the result of the the inevitable appeal that would follow before
U.S. Supreme Court Holds that Arbitrator, Not State Court, Must Determine Enforceability of Noncompetition Agreement
In a per curiam opinion, the U.S. Supreme Court held that under the Federal Arbitration Act arbitrators, not courts,must determine the enforceability of covenants not to compete when the parties are subject to agreements that call for the mandatory arbitration of disputes.
In Nitro-Lift Technologies v. Howard, two employees left their employment with Nitro-Lift and began
Dodd-Frank Act Effect on Employer Arbitration Programs
The Dodd-Frank Act created a "reward" (bounty) program for whistle blowers that voluntarily provide original information of fraud or unlawful activity in violation of the Sarbanes-Oxley Act, the Foreign Corrupt Practices Act and other securities law violations. The Dodd-Frank Act also provides whistle blowers protection from retaliation and renders pre-dispute arbitration agreements of whistle blower
Fifth Circuit Holds 24 Hour Fitness Arbitration Agreement Illusory and Unenforcable
24 Hour Fitness operates health clubs and fitness facilities across the country. As part of its operations, 24 Hour Fitness employs sales representatives. As a condition of employment, employees are required to enter into arbitration agreements to arbitrate their employment disputes with their employer. FLSA claims (i.e., overtime and minimum wage claims) are covered within the scope of the
Court Strikes Employer’s Arbitration Agreement With Employee For Lack of Consideration
There are a few pockets in the state where lawyers representing employees still vigorously fight the arbitration agreements their clients signed with employers agreeing to arbitrate all disputes. One of the pockets is in El Paso, Texas as evidenced by the number of opinions out of the court of appeals addressing the enforceability of an arbitration