The Enforceability of Arbitration Agreements

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gavel-952313-mThe Trend: Mandatory Arbitration

As an employee, you might be aware of the “arbitration agreement” that you signed with your employer upon your hiring. In the employment context, an arbitration agreement can be a more efficient way to privately settle legal disputes that may have arisen at some point since the time that you were hired than litigation is. Arbitration agreements are facing backlash however, as critics claim that employers insisting on mandatory arbitration do not have incentives to obey labor laws.

Georgia Physician Employment Lawyers

Critics of arbitration agreements state that these provisions are a way for employers to forcibly lure an employee into waiving their legal rights. Criticism of mandatory arbitration continues to be discussed and scrutinized by courts and legislators.  Some arbitration clauses have been held unenforceable by courts. In Epic Systems Corp. v. Lewis, an arbitration clause barred employees from suing their employers. In that case, the Court enforced the company’s mandatory arbitration clause, favoring corporations and employers, after employees banded together to sue their employers for damages because they were underpaid. Since the ruling, more questions have arisen regarding the enforceability of mandatory arbitration agreements. More cases have come forth of employees having disputes that fall under the Fair Labor Standards Act (FLSA), The Americans With Disabilities Act (ADA), The Family and Medical Leave Act (FMLA) and Title VII of the Civil Rights Act. Now, since the Epic Systems ruling, it is more difficult for employees to contest against discrimination.

Conflicts regarding the fairness of mandatory arbitration are continuing to be discussed by legislative bodies. Recently, the Forced Arbitration Injustice Repeal (FAIR) Act was introduced, stating “no predispute arbitration agreement or predispute joint-action waiver shall be valid or enforceable with respect to an employment dispute, consumer dispute, antitrust dispute, or civil rights dispute.” Whether or not this legislation will pass depends on whether the House and Senate can work together to push it forward.

What now?

There are many reasons that an employee may feel uncomfortable with being required to go to arbitration, including a perception that an arbitrator might be unduly influenced by compensation received from a larger employer on a regular basis in handling such disputes.  An employee that is bound by an agreement is likely to be forced into arbitration, depending on the claim and the nature of the dispute. This leaves employees with little bargaining power once an issue has arisen, but there are steps that employees can take in order to avoid being bound by the agreement. The only option for employees is to attempt to negotiate an amendment to the agreement, or to enter into it. Employers have the ability to tailor agreements and should consult an attorney to discuss the types of disputes that they want arbitration agreements for. State laws vary on whether existing employees should be bound by new agreements, or if new consideration for an amended agreement should be required.

Our Georgia-based business and healthcare law firm works with employees who are bound in arbitration clauses, and employers seeking to enforce or amend their own. If you have concerns in this regard, it is imperative to consult with an experienced healthcare attorney.

Hamil Little PC

We advise and represent hospitals, medical practices, physicians and other healthcare providers. If you have questions about this post, contact us at (404) 685-1662 (Atlanta) or (706) 722-7886 (Augusta), or by email, info@hamillittle.com. You may learn more about our law firm by visiting www.hamillittle.com.

 

** Disclaimer: Thoughts shared here do not constitute legal advice. Please consult with an attorney to discuss your legal issue.

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