United States: 2019: The Beginning Of The End For Mandatory Arbitration?

The Federal Arbitration Act (FAA) provides that agreements to arbitrate claims are valid and enforceable. With the support of federal law, employers regularly craft and rely on broad arbitration agreements, some going so far as to require arbitrators to decide whether a specific claim is subject to arbitration. Look no further than the United States Supreme Court's Epic Systems Corp. v. Lewis decision in 2018, a clear victory for employers, holding that class and collective waiver provisions in the context of employment arbitration agreements are enforceable under the FAA, despite challenges under the National Labor Relations Act. As 2019 kicks off, employers using or considering requiring arbitration of employment disputes will need to grapple with new challenges presented not only by courts of law and legislatures, but by the court of public opinion.

Interstate Transportation Workers May Be Exempt From Arbitration Agreements: On January 15, the Supreme Court handed down a new decision, New Prime Inc. v. Dominic Oliveira, that employers likely will greet with much less enthusiasm than Epic Systems. Oliveira worked as a driver for interstate trucking company New Prime Inc. Contracts between Oliveira and New Prime labeled Oliveira an "independent contractor," and required arbitration of any disputes arising out of their relationship as well as disputes concerning the scope of the arbitrator's authority. Oliveira filed a class action against New Prime in federal court, arguing that New Prime improperly classified him and other drivers as independent contractors and failed to pay all wages due. The trial court declined New Prime's motion to compel arbitration, as did the United States District Court for the District of Massachusetts. The Supreme Court affirmed the decision not to compel arbitration. First, noting that the FAA is not unlimited and contains an exclusion of coverage for "interstate transportation workers," the Court ruled that a trial level court should first decide whether this exclusion applies before deciding to compel arbitration. Second, the Court held that this exclusions applies to all interstate transportation workers, regardless of whether they are employees or independent contractors.

The Court of Public Opinion Is Having Its Own Say on Mandatory Arbitration: Public opinion may have an even bigger impact on mandatory arbitration than the Supreme Court. In the era of #MeToo, many employers are looking inward, changing or eliminating their arbitration policies even without legislation or a court telling them to do so. Instead, employee pressure has spurred these changes. For example, in December 2017, Microsoft announced it had eliminated mandatory arbitration of sexual harassment claims. In November 2018, Google followed suit. Facebook announced its own policy change shortly thereafter. Other employers, ranging from law firms to ride services such as Uber, have also announced the end of mandatory arbitration for sexual harassment claims. But Google took perhaps the biggest step to date, announcing in February that, effective March 21, it would end mandatory arbitration for its workers altogether, not just for those claims involving sexual harassment.

Legislative Attempts to Limit Arbitration: While many employers are choosing to end arbitration now, in some states, there may no longer be a choice at all. In response to pressure brought on by the #MeToo movement, legislatures around the country have drafted new laws that would allow sexual harassment victims to share their experience publicly. Some states have considered the elimination of forced arbitration of sexual harassment claims. In July 2018, for example, New York enacted legislation that prohibits any written contract from including a clause requiring the parties to submit to mandatory arbitration to resolve any allegation or claim of unlawful sexual harassment. Whether this provision of the law will be enforceable is currently an open question. The law is potentially pre-empted by the FAA, which restricts states from adopting laws that disfavor the enforcement of arbitration provisions involving interstate commerce. Until that question is resolved by a court, New York employers should at the very least be considering carving out sexual harassment claims from their arbitration provisions. New Jersey, which has long prided itself on its historically strong anti-discrimination law, is taking this concept even further. On March 18, Governor Phil Murphy signed into law sweeping changes to employers' ability to keep discrimination claims confidential. Although lawmakers touted the bill as a response to the #MeToo movement, its reach is much broader. With respect to arbitration, the law deems unenforceable any provision in an employment contract that waives any substantive or procedural right or remedy relating to any claim of discrimination, retaliation, or harassment, not just those involving allegations of sexual discrimination, retaliation, or harassment. The law, which you can read more about here, was effective immediately.

The bottom line is that the employment arbitration landscape is rapidly evolving. To make sure their policies remain enforceable, employers must continue to keep a close eye on the courts, legislatures and public opinion.

Click here to read further Insights from Day Pitney

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Skadden, Arps, Slate, Meagher & Flom (UK) LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Skadden, Arps, Slate, Meagher & Flom (UK) LLP
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions