arbitration agreements

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Employers—it’s time to check your arbitration and class-action waiver provisions. The United States District Court for the Northern District of California recently granted DoorDash drivers’ motion to compel arbitration, which may ultimately cost DoorDash nearly $12 million in American Arbitration Association (AAA) filing fees.

When a driver signs up to deliver through DoorDash, they click through and electronically sign an employment agreement containing a “Mutual Arbitration Provision” and a class-action waiver. Like many other employers with similar contracts, DoorDash’s employment agreement requires all disputes to be arbitrated by, and pursuant to, AAA rules. One of those rules requires individuals to pay a $300 filing fee and responding companies to pay a $1,900 filing fee. For years, employers have used these arbitration provisions to individually arbitrate disputes as well as avoid class-action lawsuits and courtroom litigation.Continue Reading Your DoorDash arbitration is about to arrive

On Aug. 15, 2018, the Sixth Circuit in Gaffers v. Kelly Services, Inc. held that the Fair Labor Standards Act (FLSA) does not render an arbitration agreement that requires claims to be brought individually illegal and unenforceable. Following the Supreme Court’s recent decision in Epic Systems Corp. v. Lewis, which held that a federal statute does not displace the Arbitration Act unless it includes a “clear and manifest” congressional intent to make individual arbitration agreements unenforceable, the court rejected the plaintiff’s arguments that FLSA displaced the Federal Arbitration Act simply by providing for a right to “collective action.” Instead, the Sixth Circuit, consistent with Epic, held that the FLSA “gives employees the option to bring their claims together. It does not require employees to vindicate their rights in a collective action, and it does not say that agreements requiring on-on-one arbitration become a nullity if an employee decides that he wants to sue collectively after signing one.” The Sixth Circuit then went on to reject the plaintiff’s next argument that the Arbitration Act’s savings clause permitted the court to refuse to enforce the individual arbitration agreements because they are “illegal” under the FLSA based on Epic.
Continue Reading Sixth Circuit upholds agreement to arbitrate FLSA claims on individual basis

When you are before the Sixth Circuit Court of Appeals asking it to vacate an arbitrator’s award, and the court’s opinion begins with “[t]he arbitrator’s decision would doubtless be reversed if it were a decision under the precedent of this court,” you probably think you have won the case. You would be wrong. Here is what happened in Schafer v. Multiband Corporation and what it means for arbitration agreements in the Sixth Circuit.
Continue Reading One More Example Of Why Employers Should Be Careful In Implementing Arbitration Agreements