Good News for Employers: Express Consent Required for Class Arbitration

Last year, the United States Supreme Court ruled that class action waivers in employment arbitration agreements are enforceable.  But, the ruling did not address an agreement that is silent or ambiguous regarding the intent to proceed as a class.

This issue was recently resolved by Lamps Plus v. Varela, in which the United States Supreme Court held that under the Federal Arbitration Act, a court may not compel class arbitration unless the parties have expressed their clear consent.

This case involved an arbitration clause that was ambiguous regarding the parties’ intent to arbitrate as a class.  The Supreme Court decided the issue on the basis that the Federal Arbitration Act, which governed the agreement, requires that courts enforce arbitration agreements based on the intent of the parties.  Since intent was not clear in the arbitration agreement, the Court held it would not be proper to compel class arbitration.

Despite the favorable ruling for employers, the best practice is to avoid any ambiguity on the issue of intent to proceed as a class by including a class action waiver in employment arbitration agreements.

 

The author would like to gratefully acknowledge the assistance of Joanne Warriner.

 

This blog is presented under protest by the law firm of Ervin Cohen & Jessup LLP.  It is essentially the random thoughts and opinions of someone who lives in the trenches of the war that often is employment law–he/she may well be a little shell-shocked.  So if you are thinking “woohoo, I just landed some free legal advice that will fix all my problems!”, think again.  This is commentary, people, a sketchy overview of some current legal issue with a dose of humor, but commentary nonetheless; as if Dennis Miller were a lawyer…and still mildly amusing.  No legal advice here; you would have to pay real US currency for that (unless you are my mom, and even then there are limits).  But feel free to contact us with your questions and comments—who knows, we might even answer you.  And if you want to spread this stuff around, feel free to do so, but please keep it in its present form (‘cause you can’t mess with this kind of poetry).  Big news: Copyright 2019.  All rights reserved; yep, all of them.

If you have any questions about this article, contact the writer directly, assuming he or she was brave enough to attach their name to it.  If you have any questions regarding this blog or your life in general, contact Kelly O. Scott, Esq., commander in chief of this blog and Head Honcho (official legal title) of ECJ’s Employment Law Department.