XpertHR Provides Further Guidance on the Enforceability of Arbitration Agreements

Author: Michael C. Jacobson, XpertHR Legal Editor

Rulings from two federal district courts, the Northern District of Oklahoma and the Eastern District of Louisiana, shed further light on the enforceability of arbitration agreements, a tremendous tool for employers seeking to reduce their exposure to litigation.

Employers can use this information and XpertHR's guidance to further craft their arbitration agreements and arbitration programs to withstand challenges of enforceability and, in so doing, streamline their dispute resolution processes while avoiding time consuming and costly full-scale litigation.

• In Morrison v. Volkswagen Tulsa, LLC, +2013 U.S. Dist. LEXIS 8974 (N.D. Ok. 2013), the court severed two provisions from the employer's binding arbitration agreement, including a one-year statute of limitations provision and a mandate that the employee pay a filing fee in order to commence the arbitration process. The court found that while each of these individual provisions would be unenforceable, they did not constitute the "main or essential" features of the arbitration program. Further, the employer's willingness to waive those provisions rendered the alleged employee concern over the program moot.
  • Investigations and Litigation > Arbitration > Enforceability of Arbitration Agreements
• In Anderson v. Waffle House, Inc., +2013 U.S. Dist. LEXIS 11630 (E.D. La. 2013), the court found that a valid and enforceable arbitration agreement may even survive the employee's termination. In that case, the employee sued her employer for sexual harassment, but the employer moved to compel arbitration. The employee argued that since she was terminated after she had signed the arbitration agreement, and was later re-hired without signing a new agreement, that the agreement was no longer enforceable. The court disagreed, finding that the agreement itself specified that it would survive the employee's termination and that it could only be revoked if both parties signed a contract indicating their intent to revoke it.
  • Investigations and Litigation > Arbitration > Enforceability of Arbitration Agreements

Additional Resources

Participate in Arbitration/Mediation to Resolve a Pending Legal Dispute With a Former Employee

Supreme Court: Arbitration Agreements May Trump Conflicting State Law