Mandatory Arbitration Clauses

News & Analysis as of

Going on the Offensive: How Retail and Restaurant Employers Can Mitigate Risk by Implementing Mandatory Arbitration Agreements

Over the past several years, there has been a growing trend of retail and restaurant businesses requiring their employees to sign mandatory arbitration agreements. Why? When properly drafted, mandatory arbitration...more

“The ABC’S of ACB’S” – Arbitration Clauses in Bankruptcy Court

You’ve decided that your business will fare better if you put a mandatory arbitration clause into all of your contracts. You want to be fair to your counterparty, so you choose to arbitrate under the Federal Arbitration Act....more

Sign O’ The Times: SCOTUS Denies Cert In Franchise Arbitration Dispute

On Monday of this week, after stringing the parties along for five months, SCOTUS denied cert in a case involving the intersection between arbitration and franchise regulation. The petition was filed in November of 2015,...more

MURDER! (and the potential unenforceability of arbitration clauses)

The AARP Bulletin recently ran an interesting article regarding a 100-year senior living facility resident who was strangled to death by her 97-year old roommate. Beyond the macabre and tragic situation itself, the murder...more

Specialty Wage-and-Hour Policies Offer New Protection for Companies Facing Lawsuits

Traditional employment practices liability (EPL) and directors’ and officers’ (D&O) insurance may not apply today to cover wage-and-hour liabilities, an issue we detailed in the first and second installments of this series. ...more

Arbitrator, Not Court, Must Determine Arbitrability Of Dispute Under Reinsurance Participation Agreement

Adopting in part a magistrate judge’s recommendation, a federal court in Maine recently held that the enforceability of an arbitration clause in a reinsurance agreement must be determined by an arbitrator, as opposed to a...more

TN COA: Trustee Lacked Authority To Enter Pre-Dispute Arbitration Agreement

The Tennessee Court of Appeals recently held that a trustee’s signature of brokerage account agreement containing a pre-dispute arbitration clause did not bind the trust’s minor beneficiary. The Court held that an “all...more

Proposed Legislation Would Set Back Corporations’ Use of Arbitration Clauses

The Restoring Statutory Rights Act of 2016, sponsored by Democratic Senator Patrick Leahy, was sent to congressional committee on February 4, 2016 for consideration. The bill would place restrictions on companies’ use...more

Seventh Circuit Finds No Enforceable Arbitration Agreement Case Involving Chicago-Based Credit Reporting Company

Recently, the U.S. Court of Appeals for the Seventh Circuit issued an opinion affirming a district court’s denial of a credit reporting company’s motion to compel arbitration in a putative class action. The Seventh Circuit...more

Ninth Circuit: Arbitration Provision Contained In Sham Agreement Is Not Enforceable

The Ninth Circuit reversed a district court ruling that had compelled arbitration, holding that a party may not enforce an arbitration agreement where the clause is contained in a nonbinding contract. The parties had entered...more

Court OKs Arbitration Agreement Permitting Injunctive Relief

Seyfarth Synopsis in a Second: A clause in an employment arbitration agreement that authorizes preliminary injunctive relief in court does not make the agreement unenforceable. As a general proposition, arbitration...more

Fourth Circuit Finds Availability Of Class Arbitration Is Question For Courts, Not Arbitrators

Joining the Sixth and Third Circuit Courts of Appeals, the Fourth Circuit this week held that “whether an arbitration clause permits class arbitration is a gateway question of arbitrability for the court.” Dell Web...more

Agreements to Arbitrate Are Simple, Right?

The construction industry has been a leader in the use of arbitration to resolve disputes. In the past 30 years, it is fair to say that arbitration has outpaced litigation as the dominant method of dispute resolution. The...more

Second Circuit Rules On Arbitrability Question

After a de novo review of the District Court’s ruling denying a bank’s motion to compel arbitration, the United States Court of Appeals for the Second Circuit reversed and remanded a district’s court order. The plaintiff...more

Arbitration Provision Rejected in Franchise Dispute

In Case Del Caffe Vergnano SPA v. ItalFlavors, LLC, the Ninth Circuit held that the court, not an arbitration tribunal, could review a franchise contract and determine it was a sham, based upon a second contract signed...more

The Camel’s Nose: Incorporating Commercial and Construction Arbitration Rules

There is an old proverb that states, “If the camel once gets his nose in the tent, his body will soon follow.” Stated differently, one should not let the camel’s nose inside unless he or she is prepared to accept the whole...more

Arbitration Program Gets Straight AAA’s Despite Failing in JAMS

On March 1, 2016, the New Jersey Appellate Division upheld a decision to compel an employee to arbitrate her dispute with Raymours Furniture Inc. (“Raymours”) before the Arbitration Association of America (“AAA”) after JAMS...more

Eleventh Circuit Upholds Refusal To Compel Arbitration Due To Unavailable Forum

A borrower had previously entered into a pay day loan agreement in August of 2012, which contained an arbitration provision mandating that all claims be arbitrated in the National Arbitration Forum (NAF), and under the Code...more

Payday Lending, Exemption for Community Banks, Arbitration and Ally Were the Hot Topics During CFPB Director Cordray's Testimony...

There was no shortage of emotionally charged rhetoric and pointed accusations during yesterday's testimony of the Consumer Financial Protection Bureau's (CFPB or "Bureau") Director, Richard Cordray, before the House Financial...more

Ninth Circuit Refuses To Enforce Arbitration Clause In Sham Franchise Agreement

A short new opinion from the Ninth Circuit may run counter to long-standing Supreme Court precedent. In Casa Del Caffe Vergnano v. Italflavors, 2016 WL 1016779 (9th Cir. Mar. 15, 2016), the court refused to enforce an...more

Court Punts Decision On How A Previous Arbitration Award Affects A Current Dispute To Arbitrator

A Wisconsin federal district court determined, pursuant to the parties’ arbitration clause, it is the job of an arbitrator, not the court, to decide whether a present billing issue was resolved in a prior arbitration. The...more

Looking Ahead: What the Auto Lending Industry Can Expect from the CFPB in 2016

The CFPB's critics are getting louder, arbitration clauses are spending some time on the chopping block and credit reporting continues to garner more and more attention. These are all things we can expect to focus on this...more

NLRB Says Agreement's Failure to Advise Employee of Right to File Claims with Board Violates Federal Labor Law

Over the past several years, the Equal Employment Opportunity Commission has sued several employers, claiming that their failure to explicitly advise employees that releases provided in conjunction with severance benefits...more

Have Your Cake and Eat It, Too? Handbook Contract Disclaimers & Mandatory Arbitration Policies

A New Jersey court recently used the so-called contract “disclaimer” language in an employer’s handbook to preclude the employer from enforcing a mandatory arbitration program contained in that same handbook. The court’s...more

Alabama Supreme Court Rejects Motion to Compel Arbitration Because Account Holder Did Not Click on Link to Arbitration Provision

Following the Alabama Supreme Court’s decision last Friday in Moore-Dennis v. Franklin, Nos. 1131142, 1131176, Alabama lenders should immediately review their account agreements to ensure any amendments to those agreements...more

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