Sen. Al Franken has introduced a bill aimed at undoing the Supreme Court’s recent decision in AT&T v. Concepcion, which barred class actions in arbitration cases.
The Arbitration Fairness Act would prevent employers from requiring applicants and employees to agree to arbitration as a condition of employment. The law would allow employees to elect arbitration after a dispute occurs.
It would also limit companies’ ability to force consumers to use arbitration agreements, which was the focus of the AT&T decision.
How AT&T will affect employment arbitration agreements is still not clear. The Supreme Court has consistently ruled that employers may require employees to sign arbitration agreements as a condition of employment.
However, several key arbitration agreements have been overturned under state law because they favored employers too much.
Advice: Employers that use arbitration agreements or are thinking of adopting them should always consult an attorney. Boilerplate arbitration agreements may contain clauses that aren’t specific to your business or situation. For example, an arbitration agreement that conflicts with a collective bargaining agreement or other existing contracts or practices could cause a host of problems.
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