|| Print ||
|Sponsored Articles - Brand Stories|
|Monday, September 30, 2013|
Produced by the Oregon Business marketing department
By Paul M. Ostroff and Susan K. Eggum
Some employers have embraced the use of employment arbitration agreements as a way to manage and mitigate the rising costs, risks and liabilities associated with employment-related claims. Historically, employment arbitration agreements require employees to present employment-related claims, such as employment discrimination, wrongful discharge, harassment, or claims for wages or compensation to an arbitrator, in lieu of proceeding to court. Plaintiff’s lawyers have attempted, sometimes with success, to invalidate employment arbitration agreements. Consequently, some employers have become less willing to adopt them.
Recent court decisions significantly increase the enforceability of employee arbitration agreements, and also make enforceable a properly drafted waiver of an employee’s right to file a class action in court. Such “class action waivers” in arbitration agreements may enable an employer to avoid the tremendous expense and potential liability posed by discrimination and unpaid wage class actions filed in the courts.
Increased enforceability of arbitration agreements.
In AT&T Mobility LLC v. Concepcion (2011), the U.S. Supreme Court (USSC) struck down a line of California cases that had invalidated arbitration agreements on grounds of unconscionability because they contained class-action waivers that the California courts considered to be in violation of public policy. The USSC held that the Federal Arbitration Act (FAA) requires states to enforce such agreements. More importantly, the Court reaffirmed the principles that (1) state courts must comply with the FAA, and (2) state rules concerning alleged violations of state public policy may not avoid a duty to arbitrate.
More recently, in Nitro Lift v. Howard (2012), the USSC reversed an Oklahoma Supreme Court decision that had refused to enforce an arbitration provision in an employment contract because the contract contained non-compete provisions that the state court considered to be in violation of state public policy. The USSC held that the FAA required submission of the dispute concerning the noncompete to the arbitrator, notwithstanding the state court’s determination that the provision violated state public policy.
In Hatkoff v. Portland Adventist Medical Center (2012), the Oregon Court of Appeals applied this deference to the FAA when it dismissed an employee’s discrimination claim because of his failure to comply with a mandatory arbitration procedure in the employee handbook. The Court rejected the employee’s claims of unconscionability because the arbitration process provided reasonable time limitations and made available many, but not all, of the rights that would be available to the employee in a court proceeding.
Waivers of class actions.
In American Express v. Italian Colors (2013), the USSC held, in the context of a consumer class action, that explicit class-action waivers in an arbitration agreement were valid and binding, despite the claim that the cost of arbitrating an individual claim may be greater than the potential recovery. Italian Colors thus sets the stage for enforcement of class-action waivers in employment arbitration agreements. Federal courts that have addressed the issue since Italian Colors have enforced class-action waivers in arbitration agreements. Most importantly for Oregon employers, the Ninth Circuit recently weighed in and dismissed a wage-and-hour class action because the plaintiff had signed an arbitration agreement containing a class-action waiver, Richards v. Ernst & Young, LLP [9th Circ., August 21, 2013]. A dissenting voice has come from the National Labor Relations Board, which held in D.R. Horton (2012) that class-action waivers violate employee rights to engage in “concerted activities” for their “mutual aid or protection.” However, nearly every federal court that has considered the issue has rejected the NLRB’s view.
What should employers do?
The cases point to the importance of preparing and properly implementing a carefully drafted arbitration agreement. The waiver of the right to bring class or collective actions must be explicitly stated and perhaps highlighted in the agreement. The agreement must not contain unreasonably short time limits or unreasonable limitations on remedies that could be argued as unconscionable. And implementation of employment-arbitration programs should be managed in ways to avoid claims that employees or job applicants were improperly advised of their rights concerning the agreement, or were forced to sign under duress.
Wednesday, August 27, 2014
BY AMY MILSHTEIN
Agriculture businesses ramp up to meet international demand as workforce and succession challenges loom.
Friday, August 22, 2014
BY CLIFF HOCKLEY | OB GUEST CONTRIBUTOR
When business intersects with family, a host of situations can arise. Without a clear vision and careful planning, hard-earned investments can become stressful burdens.
Tuesday, August 26, 2014
BY DEBRA RINGOLD | OP-ED CONTRIBUTOR
Why has six years become an acceptable investment in public undergraduate education that over-promises and underperforms?
Wednesday, October 08, 2014
BY LINDA BAKER | OB EDITOR
A Design Week panel discussion raises questions about how innovative we really are.
Thursday, August 28, 2014
OB Research Editor Kim Moore shares some pointers about the 100 Best Companies to Work For survey.
Sunday, October 12, 2014
BY LINDA BAKER
Cylvia Hayes, tabloid vs. watchdog journalism and the looming threat of a Cascadia earthquake.
Monday, October 06, 2014
BY LINDA BAKER | OB EDITOR
Intel's manufacturing way station; Merkley's attack dog; Diamond Foods gets into the innovation business.
|The 100 Best Nonprofits to Work for in Oregon 2014|
|A Recipe for Success|
|IBM to pay Globalfoundries to take chip unit|
|Spotify introduces family plan|
|GE profit rises 11%|
|Google profits slide 5%|
|HBO to launch streaming service|
|Mattel sales decline for fourth straight quarter|
|Converse sues to protect Chuck Taylor All Stars|
Is your business ready to join us in the call for action? This opening panel includes Oregon businesses who will discuss why they signed the Oregon Climate Declaration, the investments they are making to reduce carbon emissions, and how their actions are affecting their companies.
Get ready for two days of special events produced with the EPA, Portland Timbers and ISOS before and after the GoGreen Conference on October 16.
Finding a health insurance plan that makes both financial sense for the bottom line and provides choice for plan participants is a huge challenge for employers.
The right financing at the right time is critical for small businesses to succeed.
Among Oregon universities, Oregon Tech is special in the way it incorporates applied research into the curricula of every department.
More than 400 "Change Makers" will gather to invest in a socially sustainable community.