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Long Road Ahead As Congress Begins Chipping Away At Workplace Arbitration

We have written extensively on the recent trend of courts across the country enforcing workplace arbitration agreements, including arbitration agreements with class and collective action waivers. Since the Supreme Court of the United States held in Epic Systems Corp. v. Lewis that arbitration agreements with class and collective action waivers are enforceable, many employers have opted to institute such agreements. Indeed, such agreements have become important tools for employers as they navigate the often tumultuous waters of workplace litigation, particularly class and collective action litigation.

Following the lead of some states in limiting workplace arbitration agreements, Congress is now beginning to wade in. The U.S. House of Representatives is prepared to vote on a bill that would invalidate workplace arbitration agreements and prevent companies from using this tool to avoid workplace class and collective actions. The bill, HR 1423, would also prevent such agreements in the consumer and antitrust contexts. The bill states that its purpose is to:

  • Prohibit pre-dispute arbitration agreements that force arbitration of future employment disputes
  • Prohibit agreements and practices that interfere with the right of workers to participate in a joint, class, or collective action

The bill’s proscription against these types of agreements would apply to both employees and independent contractors. Further, the bill expressly grants courts – not arbitrators – the authority to decide the validity and enforceability of an agreement to arbitrate.

Notably, the bill would not apply to arbitration agreements in collective bargaining agreements negotiated between employers and labor organizations. Further, the bill does not appear to prevent agreements to arbitrate entered into after a workplace dispute arises. In other words, although such an agreement is unlikely in reality, employers and employees may agree to resolve a specific, existing dispute before an arbitrator.

While this bill will likely pass the House, the absence of Republican support may well scuttle the bill in the Senate. Nevertheless, given the recent trend strongly favoring enforcement of workplace arbitration agreements, including those with class and collective action waivers, and the proliferation of these agreements post-Epic and Lamps Plus, employers would be wise to keep an eye on Congressional action (or inaction) in this regard.

© 2020 BARNES & THORNBURG LLPNational Law Review, Volume IX, Number 262
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Peter J. Wozniak Barnes Thornburg Chicago  Labor Employment
Partner

Pete Wozniak is a vigorous advocate who strives to help his clients navigate issues that can be fraught with challenges as painlessly and efficiently as possible. He is a candid and personable counselor, offering his clients direct advice by leveraging his deep experience performing a broad range of outcome critical functions for complex labor and employment matters.

Pete represents clients across a number of industries, including transportation and logistics, restaurants, retail, manufacturing, and temporary staffing. Handling a number of high profile matters, he identifies the...

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Mark Wallin, Attorney, BT, Chicago, Labor Employment
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In order to provide the best counsel, Mark Wallin believes it is his role to understand his clients’ business needs so he can help them determine what resolution will provide the most benefit. His keen ability to understand his clients’ practical concerns allows him to advise on the best path to successfully resolve issues – whether through traditional litigation or negotiated resolution.

In the course of his practice, Mark has focused on providing the highest-level of service to his clients and building long-term relationships. Specifically, he defends employers in a wide range of...

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