In Epic Systems Corporation v. Lewis, the Supreme Court of the United States held that class action waiver in an employment arbitration agreement are enforceable. Yet, arbitration agreements containing such waivers may still be challenged on a variety of grounds. The law in this area is often unsettled or unclear and changes frequently. The following checklist identifies key issues employers may want to consider when adopting a class action waiver in an employment arbitration agreement. In adopting a class action waiver in an employment arbitration agreement, an employer may want to consider the following:
- How broad should the waiver be? Should it exclude
- class actions;
- collective actions;
- representative actions;
- group actions; and
- joint actions?
- Whether the arbitration agreement's delegation clause, which defines the scope of the arbitrator's authority, requires any modification with respect to class claims
- Whether the arbitration agreement should specify who will decide any disputes over the validity of the class action waiver and, if so, whether to outline the procedures to be followed in such a situation
- Whether the agreement should contain a court forum selection clause for any disputes addressing the enforceability of the class action waiver and, if so, what forum should be selected
- Whether the agreement should define what will happen if the class action waiver is held invalid for any claims and, if so, how these claims will be handled
- Whether the agreement should define how to handle an action that contains both claims that can be arbitrated and claims that can't be arbitrated and, if so, how this situation will be handled
- Whether the arbitration agreement should include an opt-out provision, and if so, what the procedures will be for employees to opt out
- Whether the arbitration agreement should include any provisions requiring confidentiality with respect to the arbitration proceedings and, if so, what the scope of such confidentiality should be
- Whether the agreement should exclude specific types of claims from arbitration, such as claims of sexual harassment or sex discrimination, and if so, how the employer can justify in a principled way why other employment claims aren't similarly excluded
- Whether any changes should be made to the agreement as a result of state legislation affecting class action waivers in employment arbitration agreements
- Whether the class action waiver should be prominently displayed within the agreement, for example, by placing it in bold text
A version of this checklist was previously published by Bloomberg BNA.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.