Arbitration

We previously wrote about Chamber of Commerce v. Bonta, 13 F.4th 766 (9th Cir. 2021), in which a split panel of the Ninth Circuit held that the Federal Arbitration Act does not preempt a California Labor Code provision prohibiting employers from requiring applicants or employees “to waive any right, forum, or procedure” for…

On June 15, the Supreme Court issued its decision in Viking River Cruises, Inc. v. Moriana, No. 20-1573, holding that the Federal Arbitration Act (“FAA”) requires California courts to honor agreements to arbitrate individual claims under the California Labor Private Attorneys General Act of 2004, Cal. Lab. Code § 2698 et seq. (“PAGA”).  Although Viking River Cruises is a significant win for California employers, it remains to be seen whether and to what extent the full scope of that win will be durable.…

Continue Reading Supreme Court Hands California Employers a Significant (if Qualified) Win

Last September, we reported on a 2-1 Ninth Circuit decision holding that even if an arbitration clause appears to be unenforceable under the prospective waiver doctrine, a delegation provision requiring the arbitrator to decide that issue in the first instance is still enforceable.  Brice v. Haynes Invs., LLC, 13 F.4th 823 (9th Cir. 2021).  This decision reversed the district court’s order denying defendants’ motion to compel arbitration.  Because the district court action was not stayed pending the appeal, it proceeded through class certification and pretrial motions.  The Ninth Circuit now has vacated the panel decision and decided to rehear the case en banc.…

Continue Reading Update: Ninth Circuit Might Backtrack on When an Arbitrability-Related Question May be Delegated to an Arbitrator

            The Supreme Court recently declined to review the Sixth Circuit’s decision in Sevier County Schools Federal Credit Union v. Branch Banking & Trust Co., 990 F.3d 470 (6th Cir. 2021), which presents a potential challenge to enforcing arbitration clauses added to standard account agreements.  The cert denial serves as a reminder that companies introducing arbitration agreements should take care to follow all contractual change-of-term requirements and create a record of affirmative customer assent whenever possible.…

Continue Reading A Closer Look: Arbitration Clauses Added to Account Agreements Face Risks After Supreme Court Declines Review of Sixth Circuit’s BB&T Decision

On May 23, 2022, the Supreme Court unanimously held that a party opposing arbitration is not required to demonstrate prejudice to show that the other party has waived its contractual arbitration rights. 

Before today’s decision, nine federal courts of appeals had adopted the rule that a “party can waive its arbitration right by litigating only when its conduct has prejudiced the other side.”  Morgan v. Sundance, 596 U.S. __ (2022).  Two other circuits had held no showing of prejudice was required.…

Continue Reading Supreme Court Decision Makes It Easier to Waive Right to Arbitration

A recent Fifth Circuit decision continues the trend of courts rejecting putative class and collective actions where absent class members are subject to arbitration agreements.

Exotic dancers sued A&D Interests, Inc. (doing business as the “Heartbreakers Gentlemen’s Club”) in a putative Fair Labor Standards Act collective action for allegedly misclassifying the club’s dancers as independent…

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.