Decisions from the U.S. Supreme Court, federal circuit courts, and a California court of appeals addressed multiple aspects of arbitration: What happens to a lawsuit when a court is asked to stay the proceedings pending arbitration, who qualifies for an exemption from the Federal Arbitration Act (FAA), what is a “dispute” and when does it “arise” were all at issue. Together, they highlight the evolving landscape of employment arbitration.
Major court cases
The following cases allowed for continued court oversight of a dispute sent to arbitration, reflect a broader interpretation of the FAA’s transportation worker exemption, navigate when a dispute arises for purposes of deciding whether the EFAA applies, and held certain provisions of an arbitration agreement were unenforceable.
Congress
The bipartisan Protecting Older Americans Act, which cleared the Senate Judiciary Committee in May 2024, may further chip away at arbitration. The measure would invalidate pre-dispute mandatory arbitration agreements regarding claims of age discrimination.
Podcasts
Hosts: Scott P. Jang, Principal and Technology Industry Co-Leader, and Corey Donovan Tracey, Principal
“In these other areas that we’ve talked about today, it looks like there’s more to come. So, we will be watching that. And employers will want to be mindful of that as it comes to their arbitration agreements and how they’re using them and implementing them with their employees.”
Hosts: Eric R. Magnus, Principal, Class Actions and Complex Litigation Co-Leader, and Atlanta Office Litigation Manager, and Katharine C. Weber, Principal and Disability, Leave and Health Management Co-Leader
“You and I would like to argue that the test that they were arguing for is clean cut. But it actually isn’t, because if the Court would have gone the other way, the debates would have become, ‘well, what is the transportation industry?’ That debate would have been probably equally as divisive.”
Key employer takeaways
The law on arbitration is ever evolving:
- Application of the EFAA is still in flux.
- Broadened interpretation of Transportation Worker Exemption means the FAA may not apply to even more workers, so state laws will apply.
- Courts are scrutinizing the enforceability of employment arbitration agreements, especially in California.
- More legislative carve-outs to mandatory arbitration.
Related readings
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