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Volume X, Number 336


November 30, 2020

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Kentucky Decision Requiring Arbitration Shows a Little Language Makes a Big Difference

K is for this week’s Kentucky decision on the subject of the enforceability of class action waivers, a continuing hot topic we have reported on here and here. The Western District of Kentucky’s decision in Coram v. Shepherd Communications, Inc. highlights that seemingly small bits of contractual language can be decisive. This decision seemingly turned on contractual language providing that an arbitrator would have the authority to allocate the costs and fees of a matter on a case by case basis.

The Letter "K"

The lawsuit involved 48 cable installers earning between $16,800 and $32,800 per year and alleging violations of wage/hour laws. The employer pointed to a class action waiver signed by each of the plaintiffs requiring them to individually arbitrate such claims. The plaintiffs argued that individual arbitration would be prohibitively expensive and chill their rights to pursue their claims. Because of the noted language, the court was not persuaded. Citing the strong federal policy in favor of arbitration evidenced by U.S. Supreme Court decisions in recent years, the court noted that the clause allowing the arbitration to allocate costs and fees meant that it was just as likely that the employer would bear the costs of arbitration as the employee.  Seemingly, the decision might have come out differently without that contractual provision.

The case illustrates the importance for employers of crafting arbitration agreements and class action waivers carefully to maximize their likelihood of enforcement and minimize the risk of expense class and collective actions.

© 2020 BARNES & THORNBURG LLPNational Law Review, Volume IV, Number 269



About this Author

William A. Nolan Labor and Employment Law Attorney Barnes Thornburg Law Firm Columbus

William A. Nolan serves as the Managing Partner of Barnes & Thornburg LLP’s Columbus, Ohio, office, which he opened in 2009. He is a member of the firm’s Labor and Employment Law Department. Bill has extensive experience as a litigator, trial lawyer and counselor. His practice includes a broad range of issues that organizations face in our rapidly changing competitive, legal and workplace environments. In short, he works to help management structure organizations, practices and relationships to proactively minimize the business disruption of disputes, and to help clients prevail when...