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A Friendly Reminder to Employers to Ensure Clarity About Individual Arbitration in Light of the Newest SCOTUS Ruling on Agreements to Arbitrate

Our colleague Gil Samberg offers analysis of the U.S. Supreme Court’s recent decision in Lamps Plus, Inc. v. Varela, which held that neither silence nor ambiguity in an arbitration agreement about whether it permits class arbitration enables a court to find that the parties agreed to allow class arbitration.  If the parties wish to permit class arbitration, they must expressly memorialize that understanding within the four corners of an agreement to arbitrate.

So, employers should take the holding in this case as a reminder to revisit their arbitration agreements in order to ensure that they clearly express whether or not class arbitration is permitted.  Typically, employers wish to require employees to arbitrate claims individually rather than collectively.  While this case instructs courts not to construe silence or ambiguity against the employer with respect to whether the arbitration agreement permits class arbitration, it’s still best to be crystal clear with your employees about your intentions.  In so doing, you may well avoid the costly headache of preliminary litigation over the meaning of your arbitration agreement before you are even able to get to the merits of a particular matter.  Having to jump through those preliminary hurdles can nullify the practical benefit of requiring your employees to arbitrate disputes in the first place.

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Donald C. Davis

Practice Group Associate

Donald C. Davis counsels Mintz clients on employment matters, including employment contracts, wage and hour disputes, employment discrimination, disability accommodations, retaliation, wrongful discharge claims, family and medical leave, defamation, and whistleblower rights.