Supreme Court to hear case on mandatory arbitration clauses
- The U.S. Supreme Court will hear three cases on whether employers can use arbitration-mandated contracts to keep workers from teaming up to sue over workplace matters, says The New York Times. Contracts require that disputes be settled through arbitration and that claims be made separately, as opposed to being brought as class-action suits.
- The high court upheld similar cases involving consumers. It now must decide if the same rules apply to employment contracts.
- In 2011, the court took AT&T’s side in a dispute, stating that the Federal Arbitration Act allowed companies to avoid class-action suits through arbitration contracts. Class-action suit waivers are the norm in contracts covering rental cars, nursing homes, cell phones and credit cards, says the Times.
This issue has been plaguing HR for some time and the courts haven't exactly provided a straightforward answer thus far. Arbitration clause use has been on the rise nationwide, especially among smaller employers looking to minimize litigation exposure in employment law situations. But courts have ruled on both sides on whether such clauses are legal for employees.
Since the Supreme Court decided to uphold arbitration-mandated contracts in the AT&T case and in consumer disputes, it might be inclined to rule the same in the three upcoming cases. Currently, the court is still down a justice. Whether a new justice would be nominated and confirmed by the time this case is reviewed is still unknown.