Archives: Arbitration

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Arbitration of PAGA Claims: Another California Divide Emerges

In a March 8, 2017, article, we talked about how the Ninth Circuit Court of Appeals compelled the arbitration of a California Private Attorney General Act (PAGA) representative claim in Valdez v. Terminix International Co., L.P., No. 15-56736 (9th Cir. Mar. 3, 2017). And, while we mentioned potential difficulties in arbitrating such cases, we didn’t … Continue Reading

Proposed Legislation That Could Impact Class Action Litigation and Arbitration – The Fairness in Class Action Litigation Act of 2017 and the Arbitration Fairness Act of 2017

Two new pieces of proposed legislation could, if passed, change the architecture and requirements of class actions and outlaw mandatory arbitration clauses in employment and consumer contracts. But neither is a sure thing. Vocal critics as well as supporters are already lined up on both sides of each bill. The Fairness in Class Action Litigation … Continue Reading

Arbitrating PAGA Claims: The Ninth Circuit Compels It in the Valdez Case

So much case law has come down in the past several years regarding California’s Private Attorneys General Act (PAGA) – and its ability to withstand class and representative action waivers – that observers might have overestimated PAGA’s arbitration-avoidance powers. The Ninth Circuit Court of Appeals offered a reminder on Tuesday that even though an arbitration … Continue Reading

Justices to Consider Arbitration Agreements With Class Waivers – The End of the Beginning?

Apologies to Winston Churchill,[1] but the conflict over the enforcement of arbitration agreements with class waivers has become an ongoing legal and ideological struggle. Some view individual arbitration as a quicker and less costly means to resolve employment disputes, while others believe it is a means to deprive employees of their legal rights. Since 2012, … Continue Reading

California Enacts Laws Aimed at Choice of Law Provisions in Arbitration Agreements and the Conduct of Arbitral Proceedings

Given California’s past resistance to mandatory arbitration agreements with class action waivers, it should come as no surprise that the state has now enacted two laws primarily directed at arbitration. On Sept. 25, Governor Jerry Brown signed a bill (Senate Bill 1241) that amended the state’s Labor Code to prohibit an employer from requiring as … Continue Reading

Following Precedent: Second Circuit Reaffirms Position Upholding Arbitration Agreements With Class Action Waivers

Amid contrary decisions by the Seventh and Ninth Circuits, the Second Circuit followed its earlier precedent in Patterson v. Raymours Furniture Co., No. 15-2820 (Sept. 2, 2016), enforcing an Employment Arbitration Program (EAP) that requires employees to submit their employment and compensation claims to individual arbitration. The EAP, however, permits employees to file charges and … Continue Reading

Reining In Individual Arbitration – Ninth Circuit Rules Class Waivers Unenforceable

In a 2-1 ruling, the Ninth Circuit became the second federal court of appeals to agree with the National Labor Relations Board’s (NLRB) position that the National Labor Relations Act (NLRA) prohibits class action waivers in employees’ arbitration agreements. Writing for the majority in Morris v. Ernst & Young, Chief Judge Sidney Thomas held that … Continue Reading

Lewis v. Epic Systems Opinion – Seventh Circuit Swimming Against the Tide on Mandatory Individual Arbitration

In a sweeping May 26 opinion, the U.S. Court of Appeals for the Seventh Circuit shook up the arbitral landscape and created a remarkable circuit split regarding the enforceability of arbitration agreements with class action waivers in the employment sector. In Lewis v. Epic Systems Corp., No. 15-2997, the Seventh Circuit held that an arbitration … Continue Reading

The Fifth Circuit Addresses an Issue That Refuses to Die: Who Determines Whether Class or Collective Arbitration Is Available?

  We opined on several occasions that cases dealing with a party’s entitlement to class or collective arbitration were a dying breed because of the increased use of class action waivers. And we have been proven wrong by several subsequent decisions. (See our November 11, 2013, March 12, 2015 and September 9, 2015 blog articles … Continue Reading

The Board vs. the Courts: Will 2016 mark the final showdown for class action waivers in arbitration agreements?

Arbitration agreements are practical tools that help employers protect confidential information and avoid the costs associated with traditional litigation. They can also be an extremely effective mechanism for employers to reduce exposure to risky employment litigation and potentially abusive collective action claims under the Fair Labor Standards Act (“FLSA”). We’ve written extensively on the courts’ … Continue Reading

Justices Take On Another California Rule – When an Arbitration Agreement Is Too Flawed to Enforce

The U.S. Supreme Court has agreed to review whether the Federal Arbitration Act (FAA) preempts a California state court rule on unconscionable provisions that is purportedly applied more stringently to arbitration agreements than to other contracts. Under the California rule, arbitration agreements with more than one unconscionable provision may not be enforced despite an express … Continue Reading

Following the Sixth Circuit’s Lead, Ohio Appellate Courts Find Whether an Agreement Allows Class Arbitration Is a “Gateway Issue”

As we stated previously, the potential impact of whether entitlement to class arbitration is a “gateway issue” will likely diminish with each passing year. (See our March 12, 2015, blog article on the denial of certiorari in Opalinski v. Robert Half International, Inc.) This is because of the increasing number of class action waivers now … Continue Reading

Justices Pass on Second Opportunity to Resolve the California PAGA Divide in the Bridgestone Case

For a second time the U.S. Supreme Court declined to hear a case challenging a California Supreme Court holding that the state’s Private Attorneys General Act (PAGA) could not be waived in a mandatory arbitration agreement. The January 5, 2015, certiorari petition in Bridgestone Retail Operations, LLC v. Brown, No. 14-790 asserted: This case presents … Continue Reading

Opalinski v. Robert Half International, Inc. — A Footnote in a Prior Opinion Doesn’t Signal the Supreme Court’s Willingness to Resolve Who Decides the Availability of Class Arbitration

After reading the Supreme Court’s opinion in Oxford Health Plans, LLC v. Sutter, 133 S. Ct. 2064 (2013), some might have concluded that the Court was ready to resolve who determines the availability of class arbitration court or arbitrator — in the right case. See 133 S. Ct. at 2068 n.2. But on March 9, … Continue Reading

The Supreme Court’s denial of certiorari in Iskanian only hardens the federal-state divide over PAGA claims

The divide continues between California and federal law on whether an arbitration agreement can entirely waive an employee’s ability to seek classwide or multiparty representational relief. The Supreme Court on Tuesday denied certiorari in CLS Transp. Los Angeles LLC v. Iskanian, No. 14-341, leaving in place the California Supreme Court’s June 23 ruling that representative … Continue Reading

High-Court Showdown Looming? NLRB Defends D.R. Horton Section 7 Decision with Full-Throated Rebuttal in Murphy Oil

In the wake of federal circuit courts rejecting its position on the issue of class action waivers, the National Labor Relations Board is digging in its heels, perhaps preparing itself for a Supreme Court battle.  Employers must continue to beware that their employment arbitration agreements barring class claims may still be found unenforceable by the … Continue Reading

The California Divide: Federal Courts Refuse to Follow State Supreme Court’s Iskanian Decision

One of the last barriers to full enforcement of arbitration agreements with class action waivers sustained another blow last week.  A California federal district court disagreed with the California Supreme Court in holding that an employment arbitration agreement can waive an employee’s right to pursue a representative claim under the state’s Private Attorney General Act … Continue Reading

Sixth Circuit Refuses to Uphold Collective Action Waiver Absent Arbitration

My working title for this blog was “collective action grab bag,” concerning the recent Sixth Circuit case in Killion v. KeHE Distributors, LLC, Case Nos. 12-3357/4340 (6th Cir. July 31, 2014).  I went with the title that seemed to be of interest to most practitioners, but the case actually touched on several issues, one of … Continue Reading

Third Circuit: Availability of Classwide Arbitration is an Issue for the Courts – Not Arbitrators – Unless the Parties Agreed Otherwise

Wednesday, the Third Circuit held that the determination of whether an agreement allows classwide arbitration is a question of arbitrability for the courts “unless the parties unmistakably provide otherwise.”  Opalinski v. Robert Half International Inc., Case No. 12-4444 (3d Cir. July 30, 2014). In Opalinski, former Robert Half International, Inc. (RHI) employees filed a putative … Continue Reading

Tenth Circuit Criticizes District Court for Permitting “Death by Discovery” in Dispute over Arbitrability

The purpose of arbitration is to resolve disputes more quickly and inexpensively than litigation.  It’s getting less difficult to enforce such agreements, but apparently some courts and parties have yet to get the message as a recent Tenth Circuit reflects.  Howard v. Ferrellgas Partners, L.P, Case No. 12-3061 (10th Cir. Apr. 8, 2014).  It’s not … Continue Reading

Russell v. Citigroup Inc. – Language in Revised Arbitration Agreement Torpedoes its Application to Pending Class Action

A Sixth Circuit panel found the text of an updated arbitration agreement indicated it did not apply to a wage and hour class action already pending when the agreement was signed.  Russell v. Citigroup, Inc., Case No. 13-5994 (6th Cir. April 4, 2014). Keith Russell had worked at a Citicorp call center in Florence, Kentucky … Continue Reading
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