Supreme Court Sides With Viking River Over Arbitration of California PAGA Claims

On June 15, 2022, the Supreme Court of the United States ruled in favor of Viking River Cruises Inc. in a case over whether it could use an arbitration agreement to force a lawsuit brought under California’s Private Attorneys General Act (PAGA) on behalf of aggrieved employees into arbitration. In Viking River Cruises, Inc. v. Moriana, No. 20-1573, the Supreme Court’s highly anticipated decision, the Court reasoned that the Federal Arbitration Act (FAA) requires the enforcement of an arbitration agreement that waived an employee’s right to bring individual claims through PAGA and that once those individual claims are sent to arbitration there is no standing to bring representative claims for violations of the California Labor Code on behalf of other aggrieved employees.

Supreme Court’s New Arbitration Ruling: Limits Federal Jurisdiction For Confirming or Challenging Arbitration Awards Under the FAA

On March 31, 2022, the Supreme Court of the United States issued a decision in Badgerow v. Walters, No 20-1143, addressing when federal courts have jurisdiction to rule on motions to confirm, modify, or vacate arbitration awards under the Federal Arbitration Act (FAA).

No Surprises Act: Federal Court Invalidates Parts of the Independent Dispute Resolution Process

On February 23, 2022, the U.S. District Court for the Eastern District of Texas struck down the part of the interagency interim final rule implementing the “independent dispute resolution” (IDR) procedures created by the No Surprises Act, which took effect for calendar-year plans on January 1, 2022 (Texas Medical Association v. U.S. Department of Health and Human Services). Though the bulk of the rule remains in effect, the changes will impact health plans and the employers that sponsor them.

Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act Heads to President’s Desk

On February 10, 2022, the U.S. Senate passed S. 2342, the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021, just a few days after the U.S. House of Representatives passed the bill, H.R. 4445, on February 7, 2022. If signed by President Biden as expected, the bill would make predispute arbitration agreements or joint-action waivers invalid and unenforceable “with respect to a case which is filed” that “relates to” a sexual assault or sexual harassment dispute, “at the election of the person alleging” the misconduct.

Does the Federal Arbitration Act Preempt California’s Private Attorneys General Act? Supreme Court Takes Up Million-Dollar Question

On March 30, 2022, the Supreme Court of the United States will hear the matter of Viking River Cruises, Inc. v. Moriana, Case No. 20-1573. The Court will answer the question, “Whether the Federal Arbitration Act requires enforcement of a bilateral arbitration agreement providing that an employee cannot raise representative claims, including under PAGA.”

Supreme Court to Consider FAA Preemption of PAGA Claims

In a much-awaited decision, the Supreme Court of the United States indicated that it would consider whether the Federal Arbitration Act (FAA) preempts California’s rule prohibiting arbitration of Private Attorneys General (PAGA) claims under the California Labor Code. Depending upon the high court’s ultimate ruling, the case has the potential to upend wage and hour litigation in California.

U.S. Chamber of Commerce Asks Ninth Circuit to Reconsider Ruling Upholding California’s Mandatory Employment Arbitration Ban

On October 20, 2021, the U.S. Chamber of Commerce, the lead plaintiff challenging AB 51, filed a petition for rehearing en banc with the U.S. Court of Appeals for the Ninth Circuit, seeking to reverse the Ninth Circuit’s decision in Chamber of Commerce of the United States of America v. Bonta, No. 20-15291 (September 16, 2021), partially upholding AB 51.

Massachusetts Court Ruling Highlights Importance of Employer Responses to Personnel File Requests in Motions to Compel Arbitration

Judge Shannon Frison, sitting in the Middlesex County Superior Court in Massachusetts, recently issued a ruling that highlights for employers the importance of providing complete and timely responses to requests for employee personnel files. Judge Frison’s ruling arose in the context of an employer’s motion to dismiss or compel arbitration in accordance with the terms of an arbitration agreement that the employer had failed to produce in response to a request for the employee’s personnel file.

Ninth Circuit Upholds Portions of California Law Prohibiting Use of Mandatory Arbitration Agreements

In a split 2-1 decision that likely raises more questions than it answers, the Ninth Circuit Court of Appeals cast some doubt upon the ability of employers to implement mandatory arbitration agreements with their employees. In Chamber of Commerce of the United States of America v. Bonta, the Ninth Circuit upheld portions of California Labor Code section 432.6, which prohibits employers from making arbitration agreements a condition of employment and imposes significant criminal and civil sanctions for violations. The Ninth Circuit’s decision holds that arbitration agreements signed by parties remain enforceable (even if they violate section 432.6), while parties who refused to sign an arbitration agreement may still seek a remedy against the employer under the statute.

Texas Supreme Court Issues Two Key Pro-Arbitration Decisions

Arbitration agreements are intended to expedite the legal process while minimizing fees and costs. In reality, former employees and their counsel often resist submitting their employment claims to arbitration, resulting in protracted and expensive litigation before trial and appellate courts on the issue of whether there is an enforceable arbitration agreement. This year, the Supreme Court of Texas issued two key decisions that may provide employers with stronger legal grounds for enforcing their arbitration agreements.

5 Key Employee Handbook Updates to Consider in 2021

With the onslaught of the pandemic in 2020, many employers were busy dealing with staffing issues, safety concerns, and COVID-19–related legislation. There may have been little to no time to address handbook policies. With many changes on the horizon in 2021 under President Biden’s administration and the adaptations in the working environment due to COVID-19, it may be a good time for employers to turn to the company handbook to ensure it is up to date. This article will highlight five areas to which employers may want to give special attention in 2021.

New York City Says Goodbye to At-Will Employment for the Fast Food Industry

On January 5, 2021, New York City Mayor Bill de Blasio signed legislation that effectively ends at-will employment for fast food employees in New York City. The new law takes effect on July 4, 2021, and would make New York City the nation’s first jurisdiction to create job protections for a particular industry. However, at least some portions of the new law may be ripe to challenge on federal preemption and other grounds.

First Circuit Holds FAA Does Not Drive Independent Contractors’ Class Action Wage Claims Case

Recently, and for the first time in more than 20 years, the United States Court of Appeals for the First Circuit ruled on the transportation worker exemption contained in Section 1 of the Federal Arbitration Act (FAA). In Waithaka v. Amazon.com, Inc., 966 F.3d 10 (1st Cir. 2020), the court of appeals upheld a district court’s decision not to compel Amazon “AmFlex” delivery drivers (who are independent contractors) to arbitrate their wage claims. The decision is significant for companies that require their delivery drivers to sign arbitration agreements.

New Jersey Supreme Court Confirms Enforceability of Employment Arbitration Agreements With Class Action Waivers Exempted Under FAA

On May 21, 2018, in Epic Systems Corporation v. Lewis, the Supreme Court of the United States upheld class action waivers in arbitration agreements, ruling that the Federal Arbitration Act (FAA) instructs “federal courts to enforce arbitration agreements according to their terms—including terms providing for individualized proceedings.” On July 14, 2020, the Supreme Court of New Jersey handed down a landmark decision of its own upholding the enforceability of employment arbitration agreements with class action waivers under the New Jersey Arbitration Act (NJAA), even if the agreements are exempted from the coverage of the FAA, by virtue of the FAA’s Section 1 “transportation worker exemption.”

California Supreme Court Decides Unfair Competition Claims for Civil Penalties Should Be Tried by a Court Rather Than a Jury

On April 30, 2020, the Supreme Court of California issued its decision in Nationwide Biweekly Administration, Inc. v. Superior Court of Alameda County, a case that received a fair amount of attention in 2019 when it seemed possible the court might allow claims under California Business & Professions Code Sections 17200 et seq. and 17500 et seq. (commonly called the unfair competition law (UCL)) to be tried by jury.

USMCA Preview: Alternative Methods of Dispute and Temporary Relief for Vehicle and Light Truck Producers

After more than two years of deliberation, the United States-Mexico-Canada Agreement [T-MAC in Mexico] will enter into force on July 1, 2020. The three-nation agreement includes a key element employers may want to take note of—employers and unions will be able to negotiate disputes through alternative methods of dispute resolution.

Employer’s Signature May Not Be Essential to Enforceability of Arbitration Agreement

The Court of Appeals for the First District of Texas recently held that the absence of the employer’s signature from an arbitration agreement did not render that agreement unenforceable. SK Plymouth, LLC v. Simmons, No. 01-19-00433-CV (April 16, 2020). Central to the court’s holding was the absence of any language in the arbitration agreement indicating that the employer’s signature was a condition precedent to the enforcement of the agreement.

California Worker’s Claim for Individual Damages in LWDA Filing Held Not Dispositive in Motion to Compel Arbitration Inquiry

Although the Supreme Court of the United States has not yet taken up the issue, California courts routinely hold an employee cannot be compelled to submit to arbitration an action seeking penalties under the Private Attorneys General Act of 2004 (PAGA), although the employee may be compelled to arbitrate his or her individual wage claims. In determining whether a litigant seeks individual damages and therefore may be compelled to arbitrate wage claims, does the plaintiff’s Labor and Workforce Development Agency (LWDA) notice letter control?

The Who, What, and When on Illinois Employment Agreements Under the Workplace Transparency Act

The Illinois Workplace Transparency Act (WTA) (Public Act 101-0221) is designed to protect employees, consultants, and contractors who truthfully report alleged unlawful discrimination and harassment or criminal conduct in the workplace by prohibiting nonnegotiable confidentiality obligations, waivers, and mandatory arbitration of allegations of discrimination, harassment, or retaliation.

Ohio Appellate Court Finds Overly Broad Arbitration Agreement Unenforceable

In Thomas v. Hyundai of Bedford, No. 108212 (January 23, 2020), the Eighth District Ohio Court of Appeals held that an arbitration clause in an employment contract was substantively and procedurally unconscionable because it sought to include as arbitrable all conceivable claims between the parties, even those outside the employment relationship. The Eighth District’s decision serves as a reminder of the benefits of well-tailored arbitration agreements.

Arbitration Decisions Matter: The NLRB Reverts to Prior Standards on Deferral to Arbitration and Pre-Arbitration Settlements

Arbitration is a strongly favored federal policy and generally can be relied on to resolve even statutory discrimination claims. This is not a novel concept in federal jurisprudence from the Supreme Court of the United States down (although California and the Obama-era National Labor Relations Board (NLRB) have and had a different view).