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Review of mandatory employee arbitration clauses

| Feb 13, 2017 | Employee Rights |

A trend in employment contracts is to force employees to waive their rights to court, to file class actions, and other retaliatory actions. Instead, most of these contracts force employees into arbitration. The Supreme Court agreed to hear three consolidated actions over mandatory arbitration agreements. This post will go over these agreements and what it means that the Court is reviewing them.

These clauses are challenged as inherently unfair because the employee is always at a disadvantage in mandatory arbitration. The arbitrator is paid by the parties, and the employer is the consistent customer during that dispute, therefore, the arbitrator is incentivized to compromise for the employer.

The Court accepted review of arbitration clauses after the Circuit courts disagreed. Courts in Chicago and San Francisco agreed that the National Labor Relations Act overrules the provisions in the Federal Arbitration Act which permit companies to require mandatory arbitration agreements. But, the court in New Orleans disagreed.

The review of this case must be considered in light of the previous decision in which the court ruled against consumers. In a 2011 case, a California couple challenged a $30 fee for a “free” cell phone and tried to certify a class. The company included mandatory arbitration provisions which they argued precluded any right to organize a class action. The Supreme Court agreed. Since that decision, every company now includes mandatory arbitration and waiver of class action rights.

If you believe that your employer violated your rights, then you may want to call a lawyer ? you could have a valid employment claim. As you can see, your employment agreement will significantly impact your right to litigation and recovery. An attorney can go over the agreement and help you determine the best way to pursue compensation.


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