Recent Court Decisions Shine a Renewed Light on the Desirability of Employee Arbitration Agreements
Lane Powell Shareholders Paul Ostroff and Susan K. Eggum co-authored an article in Oregon Business magazine’s October 2013 issue titled “Recent Court Decisions Shine a Renewed Light on the Desirability of Employee Arbitration Agreements.” In the article, Ostroff and Eggum discussed how some employers have mitigated the rising costs, risks and liabilities associated with employment-related claims through the use of employment arbitration agreements. Ostroff and Eggum also examined recent court decisions that have significantly increased the enforceability of employee arbitration agreements and which also make enforceable a properly drafted waiver of an employee’s right to file a class action in court.
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.