October 25, 2021

Volume XI, Number 298

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October 22, 2021

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United States Supreme Court Rules in Favor of Employers Regarding Class Action Arbitration

Striking a major blow to employees, in a 5-4 ruling (along party lines which shows the importance of Trump appointee Gorsuch), the United States Supreme Court has ruled that employers can require employees to waive their right to class action lawsuits and may instead force employees to arbitrate their claims individually. This is particularly important in the wage and hour context, where employers who are alleged to have failed to pay proper wages often find themselves facing class-action suits, where many employees, each owed a small amount of money, join together to form one large and potentially very expensive wage and hour action. If, as the United States Supreme Court has just ruled, individuals can be prevented from joining together and can be required to bring such claims individually through arbitration, the number of individuals willing to go through the judicial process alone, without the company and strength of a “class” may decrease dramatically. Moreover, the plaintiff’s bar may think twice about bringing an individual action as the fee potential will dramatically lower.

As a result of this ruling, all employers should immediately consider whether to require employees to sign some form of an arbitration agreement. Of course, employers must be mindful of the fact that arbitration does have its disadvantages, such as the costs involved and the wage and hour experience of the arbitrator assigned that ultimately adjudicates the matter (as opposed to seasoned federal court judges).

© 2021 Giordano, Halleran & Ciesla, P.C. All Rights Reserved National Law Review, Volume VIII, Number 146
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About this Author

Jay S. Becker, Giordano Law Firm, Labor & Employment, Cannabis Law, Corporate Labor Relations Employment Law and Litigation
Shareholder

Jay, chair of the Labor and Employment Practice Area, devotes his practice to labor relations and employment law and litigation on behalf of management. His experience includes conducting trials, hearings, arbitration and mediation sessions; responding to state and federal administrative agency charges; collective bargaining; drafting employment-related corporate documents such as restrictive covenants, employee handbooks, employment agreements, various stock and compensation plans, and separation/severance agreements. He counsels employers on all employee relations issues including, but...

732-741-3900
Jeri L. Abrams, Giordano Halleran, Employment Documentation Lawyer, Workplace Litigation Attorney,Labor & Employment
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Jeri focuses primarily on employment law, with an emphasis on drafting and negotiating complex employment-related documentation, such as executive employment, consulting, restrictive covenant, commission, bonus, retention, change-in-control and severance agreements. Jeri counsels employers on a broad range of employment matters, including hiring, disciplining and terminating employees, family and medical leaves, disability leaves and accommodations, anti-discrimination and anti-retaliation laws, wage and hour compliance, and reductions in workforce. She works closely...

732-741-3900
Ari G. Burd, Shareholder, Giordano Law Firm, Labor & Employment, Cannabis Law, Health Care
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Ari devotes his time to assisting and defending employers with regard to traditional employment issues. He frequently counsels employers for compliance with New Jersey laws and has extensive transactional and litigation experience.

Ari has litigated employment matters throughout the state, having made appearances in almost every Superior Court in New Jersey, as well as before both Federal District Courts in New Jersey and the Federal and State Courts in New York.  These actions have involved a diverse range of claims such as wrongful discharge, discrimination, harassment,...

732-741-3900
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