Category Archives: Arbitration

Arbitration Waiver, Quirky Question # 131

Quirky Question # 131:

We have employment agreements with our employees that contain mandatory arbitration provisions.  Recently, one of our senior executives departed and joined a competitor.  This arguably violated his non-competition agreement, though that involves issues unrelated to my present inquiry.

We filed a lawsuit against our executive alleging breach of contract and other wrongful conduct.  At the same time we filed our Complaint, we filed a Motion for Preliminary Injunction and a Motion to Compel Arbitration.  We decided not to pursue the Motion to Compel Arbitration, electing instead to see what kind of result we could first obtain from the federal court on our preliminary injunction motion.  Our thinking was that if we could get a positive outcome from the federal judge on the injunction motion, we could keep the case in federal court and disregard the arbitration forum.  Unfortunately, the federal judge ruled against us on our motion for injunctive relief, so our former employee continues to compete with us.

We now are trying to schedule our motion to compel arbitration.  Our ex-employee’s attorney, however, claims that we “waived” our right to pursue our claims in arbitration.  How can that be?  We filed our Motion to Compel Arbitration at the beginning of the case, some four months ago, so our ex-employee was on notice all along regarding our desire to arbitrate.  Moreover, shouldn’t the arbitrator decide the issue of whether we “waived” our right to pursue arbitration? Answer→

Arbitration Agreements for Non-English-Speaking Employees, Quirky Question # 110

Quirky Question # 110:

Our company utilizes a mandatory arbitration policy for our employees.  In essence, our employees are required to arbitrate any claims relating to their employment relationship.  As is true for many other companies, our workforce has become increasingly diverse, and now includes many employees for whom English is a second language.  If we sought to enforce our arbitration agreement against someone with limited English language skills, would we encounter any problems? Answer→

14 Penn Plaza: US Supreme Court Decision

U.S. Supreme Court Enforces Agreement Compelling Unionized Employees to Arbitrate Discrimination Claims

Dorsey’s Analysis

On April 1, 2009, an ideologically divided United States Supreme Court resolved a long-standing controversy regarding the arbitration of discrimination claims of union-represented employees.  The Court’s decision in 14 Penn Plaza v. Byett resolved a split and an issue of confusion among lower courts, and the Court clarified and synchronized two of its earlier decisions concerning arbitration in the employment arena.  The question presented by 14 Penn Plaza was whether a provision in a collective bargaining agreement that clearly and unmistakably required union members to arbitrate claims arising under the Age Discrimination in Employment Act was enforceable.  The Supreme Court, in a 5-4 opinion written by Justice Thomas, held that “a collective bargaining agreement that clearly and unmistakably requires a union member to arbitrate ADEA claims is enforceable as a matter of federal law.”  The decision may have a number of important practical implications for employers with unionized workforces. Answer→

Enforcing Arbitration Agreements, Quirky Question # 90

Quirky Question # 90:

Several years ago our company adopted as arbitration policy.  We felt that this was one way we could control our employment litigation costs.  Our arbitration policy is set forth in our Employee Handbook, which is available to our employees on line.  We encourage our employees to review the Handbook if they have any questions about our company’s policies.  Our system does not allow us to track who accesses the Handbook and who does not.  We recently terminated one of our employees.  He now claims that our decision was discriminatory and he filed a Charge of Discrimination.  He then obtained a right to sue letter and filed a lawsuit alleging race and age discrimination.  We intend to file a motion to compel arbitration.  Is there anything we should be concerned about  before proceeding to arbitration? Answer→

Mandatory Arbitration, Quirky Question # 59

Quirky Question # 59:

We are a large company with substantial number of employees.  We have decided to compel our employees to arbitrate all of their employment claims, through the adoption of a mandatory arbitration policy.  Since we are writing the agreement that binds the employees, we have decided to include a provision barring any class action claims.  Any problems with this approach? Answer→