Federal Arbitration Act

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Last week, the Ninth Circuit issued a decision holding that California employers can require employees to enter into mandatory arbitration agreements as a condition of their employment. In the decision, Chamber of Commerce v. Bonta, No. 20-15291 (9th Cir., Feb. 15 2023), a three-judge panel reversed the Ninth Circuit’s own prior decision and found that Assembly Bill 51 (AB 51), which sought to impose criminal and civil penalties on employers who require employees to enter into such agreements, is preempted by federal law.
Continue Reading Ninth Circuit Holds California’s Ban on Mandatory Arbitration Agreements is Preempted by the Federal Arbitration Act

Just days ago, the highest court in Massachusetts—the Supreme Judicial Court (“SJC”)— decided whether former food delivery drivers for GrubHub could escape their arbitration agreements and bring a wage and hour class action lawsuit in court. In excellent news for employers operating in the intrastate delivery sector, the SJC held that they could not. Archer v. GrubHub, Inc., SJC-13228. 2022 WL 2964639 (July 27, 2022) (“GrubHub II”). …
Continue Reading Massachusetts High Court Decides Intrastate Delivery Drivers Unable to Ditch Their Arbitration Agreements

Earlier this month, the U.S. Supreme Court in Southwest Airlines Co. v. Saxon unanimously held that a ramp supervisor who frequently handled cargo for an interstate airline company was exempt from coverage under the Federal Arbitration Act (FAA) because she belonged to a “class of workers engaged in foreign or interstate commerce.” 9 U.S.C. § 1.
Continue Reading Airline Cargo Loaders Are Exempt Under the Federal Arbitration Act, Supreme Court Holds

The United States Supreme Court has granted consolidated review of three cases to determine whether arbitration agreements that waive employees’ rights to participate in a class action lawsuit against their employer are unlawful. The Court’s decision to address the uncertainty surrounding class action waivers of employment claims follows a circuit split last year in which the Fifth and Eighth circuits upheld such waivers and the Seventh and Ninth circuits found that such waivers violate the National Labor Relations Act. Given the increasingly widespread use of class action waivers by employers to stem costly class and collective actions, the high court’s ruling is likely to have a significant nationwide impact.
Continue Reading Supreme Court Will Rule On Legality of Class Action Waivers in Employer Arbitration Agreements

On November 24, 2015, the U.S. Court of Appeals for the Fourth Circuit refused to enforce an arbitration clause in an employee handbook on the grounds that the employee never agreed to be contractually bound by the handbook, and that a court can only compel arbitration where it is satisfied that the parties have agreed to arbitrate. This case, Lorenzo v. Prime Communications, L.P., should serve as a warning to employers to review their employee handbooks to be sure that provisions, like an arbitration clause, will be enforceable.
Continue Reading Fourth Circuit Invalidates Employee Handbook Arbitration Clause

A 2-1 California Court of Appeal held on October 17 that drivers for a food service provider did not have to arbitrate their state statutory claims brought under the California Labor Code despite a binding arbitration agreement covering the “application or interpretation” of the driver agreements.  The drivers alleged that their employer, Mike Campbell & Associates, misclassified them as independent contractors, denying them wage law protections under the California Labor Code, and was thus liable for nonpayment of wages, illegal deductions, and recordkeeping violations.  Rather than challenge the trial court’s ruling that they were bound by the arbitration clause, the drivers argued that their statutory claims did not arise out of the arbitration agreement and thus did not require an interpretation of the arbitration clause. …

Continue Reading California Appeals Court Allows Drivers To Move Forward With Litigation