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Arbitration Agreements + Class Action Waivers


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Discussing the Supreme Court's recently issued decision regarding class action waivers in arbitration agreements, Labor and Employment attorney Brendan Feheley gave a presentation detailing the decision’s possible impact on the types of claims brought against your company. This presentation offered insights into the use of arbitration agreements with employees and whether arbitration agreements may be right for you and your organization.

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Arbitration Agreements + Class Action Waivers

  1. 1. Class Action Waivers + Arbitration Agreements Presented by Brendan Feheley July 24, 2018
  2. 2. What is a Class Action WAIVER? Requires individuals to bring claims individually Common tactic to avoid consumer class actions, FLSA collective actions or FCRA class actions
  3. 3. Types of cases where class action waivers would be helpful FLSA Collective Action FCRA Issues Consumer Issues
  4. 4. Issue is one statute versus another
  5. 5. FAA requires courts to “respect and enforce agreements to arbitrate”
  6. 6. NLRA Section 7 says employees have right to engage in “other concerted activities”
  7. 7. Circuits were SPLITon the issue
  8. 8. The Debate is Settled Epically. Held class action waivers are enforceable in arbitration agreements “[the NLRA] does not express approval or disapproval of arbitration. It does not mention class or collective action procedures. It does not even hint at a wish to displace the Arbitration Act—let alone accomplish that much clearly and manifestly, as our precedents demand.”
  9. 9. Settled circuit court SPLITregarding class action waivers in arbitration agreements
  10. 10. What We Know FOR SURE If you have an arbitration agreement that contains a class waiver it is permissible A stand-alone class action waiver is currently a violation of the NLRA
  11. 11. What We DON’T KNOW Will the NLRB decide to revisit this issue as a result of the Board composition change? State Action? Name and Shame?
  12. 12. Should You Have an ARBITRATION AGREEMENT?
  13. 13. It depends.
  14. 14. Example Employer with multiple locations, large number of employees with little or no direct communication with one another One employee files an FLSA wage claim Arbitration agreement requires employee file individual claim Possibility lawyer can’t find other class members, employer has much smaller exposure
  15. 15. It’s Cheap
  16. 16. It’s Quick
  17. 17. It’s Just Like Court
  18. 18. At Least I Can Appeal
  19. 19. Confidentiality Pick Your Poison Customize the Process Avoid a Jury Avoid Big Ticket Claims
  20. 20. How do I make sure MY AGREEMENT Avoid Procedural Unconscionability Avoid Substantive Unconscionability passes muster?
  21. 21. Avoid Procedural Unconscionability Click wrap Hiding arbitration language Color of text Surprise
  22. 22. Avoid Substantive Unconscionability (Unfair Terms) Cost Recovery Arbitrator Selection Discovery Opt-Out
  23. 23. ISSUES to Consider Scope Rules Cost-Sharing
  24. 24. ISSUES to Consider Arbitrator Authority Evidentiary Requirements #MeToo
  25. 25. Practical Issues Plaintiff's counsel will argue your agreement is unconscionable Litigate everything in court before you even get to arbitration Remember: an arbitration agreement doesn’t limit everything
  26. 26. TIPSfor Agreement Sign it, every time Employee recovery same as court Put the time in early
  27. 27. Brendan Feheley Kegler Brown Hill + Ritter 614-462-5482