Companies that include arbitration agreements in online terms and conditions may want to take note of a recent Ninth Circuit opinion that refused to enforce an arbitration agreement on lack-of-consent grounds even though the arbitration agreement contained an opt-out provision.

In Berman v. Freedom Financial Network, LLC, the Ninth Circuit affirmed the district court’s

A new law signed by President Biden brings significant changes to employers’ ability to require arbitration of certain disputes with employees and could lead to an increase in sexual assault and sexual harassment claims against employers in court.  On March 3, 2022, President Biden signed into law the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021” (the “Act”).  The Act amends the Federal Arbitration Act (“FAA”) to provide that predispute arbitration agreements and predispute joint-action waivers relating to sexual assault and sexual harassment disputes are unenforceable at the election of the person or class representative alleging the conduct.  The Act took effect immediately upon signing.

Continue Reading A Closer Look: New Law Ends Mandatory Arbitration for Sexual Assault and Sexual Harassment Claims

Arbitration agreements have become a fixture of American contracts, and companies have turned to them as a strategy for reducing class action exposure.  In recent years, plaintiffs have responded by initiating “mass arbitrations” – individual arbitrations filed on behalf of hundreds or thousands of customers or employees, which may immediately threaten companies with millions of dollars in arbitration-initiating fees alone.  Many companies, however, have been slow to react to the risks posed by mass arbitration.  This post discusses some of those risks, the difficulties companies have encountered in trying to address this issue, and potential strategies for mitigating the threat posed by mass arbitration.

Continue Reading A Closer Look: Avoiding a “Mass”-ive Arbitration Problem

The Ninth Circuit has continued to chip away at California’s McGill rule, which bars the enforcement of arbitration provisions that waive a plaintiff’s right to seek public injunctive relief in any forum. In Cottrell v. AT&T Inc., 2021 WL 4963246 (9th Cir. Oct. 26, 2021), the court extended its earlier decision in Hodges v.

The Supreme Court has agreed to hear a case that may make it easier for companies to be found to have waived arbitration requirements in their contracts. Morgan v. Sundance, Inc. gives the Court an opportunity to resolve a circuit split over whether a party can be deemed to have waived its right to compel

A company facing a putative class action from a plaintiff who has opted out of an arbitration agreement may still file an early motion to defeat class certification if the company can prove that most of the class has agreed to arbitration. In Lawson v. Grubhub, Inc., 2021 WL 4258826 (9th Cir. 2021), the

Arbitration agreements often delegate to the arbitrator threshold questions of arbitrability, including whether the agreement itself is valid and enforceable. The Second, Third, and Fourth Circuits have invalidated entire arbitration agreements as prospective waivers—unenforceable waivers of a party’s right to pursue federal statutory remedies—without separately analyzing or enforcing the delegation clauses in those agreements.

The

California’s McGill rule is often invoked by plaintiffs to invalidate arbitration agreements that purport to waive the right to seek public injunctive relief in any forum. But the Ninth Circuit’s decision in Hodges v. Comcast Cable Communications, LLC, 2021 WL 4127711 (9th Cir. 2021), limits the impact of the McGill rule by narrowly defining

In Chamber of Commerce v. Bonta, 2021 WL 4187860 (9th Cir. 2021), the Ninth Circuit held, in a 2-1 decision, that the Federal Arbitration Act does not preempt a California Labor Code provision prohibiting employers from requiring any applicant or employee “to waive any right, forum, or procedure” for certain claims. According to the