Mandatory Arbitration Clauses

News & Analysis as of

Arbitration Clause In Agreement Between Insured And Reinsurer Held Invalid Under Nebraska Law

A federal district court has held an arbitration clause in a Reinsurance Participation Agreement (RPA) between an insured and a reinsurer invalid and unenforceable under governing state law. The RPA complemented a standing...more

Arbitration Clause Survives Contract Termination, Sixth Circuit Holds

Can an employer compel arbitration in accordance with an arbitration clause in a contract that has terminated? The U.S. Court of Appeals for the Sixth Circuit recently answered this question in the affirmative....more

The Construction Advantage – Issue 3

Reaffirming the Iron Hand of an Arbitration Agreement - Does the fact that the named arbitration company has gone out of business make an arbitration clause unenforceable? Given the legislative bias toward arbitration,...more

Treaty Tips: The Service Of Suit Provision

One common provision in reinsurance agreements is a Service of Suit provision, which typically provides that the parties consent to the jurisdiction of “any court of competent jurisdiction.” The breadth of the traditional...more

Is It Time To Include Mandatory Arbitration Clauses In All Reinsurance Policies? Mandatory Clauses Could Avoid Unnecessary Future...

Recent reports on the continued easing of collateral requirements for non-US reinsurers that operate in the US, raise the question: with the anticipated, increased presence of non-US reinsurers state-side, will more...more

Despite Delay, Failure to Plead, and Participation in Litigation, Federal Court Enforces Arbitration Clause

Mandatory arbitration clauses have proven to be very powerful weapons employed by businesses to avoid the duration, expense, and often times negative publicity associated with protracted litigation in both federal and state...more

California Weighs In: No Mandatory Arbitration For Dispute Over Validity Of Trust Instrument

A hot topic in estate planning these days is whether mandatory arbitration clauses should be included in trusts. The idea is to require trust beneficiaries to arbitrate their disputes rather than going through the time and...more

A Woolley Situation: District of New Jersey Refuses to Enforce Arbitration Clause in Employee Handbook

New Jersey employers should consider the risks of including an arbitration agreement in a standard employment handbook in light of a recent decision by the United States District Court for the District of New Jersey. In...more

Fifth Circuit Delivers Crippling Blow to Controversial NLRB Class Action Waiver Theory

Arbitration is generally supposed to be faster, cheaper, and more predictable than litigation. Homebuilder D.R. Horton, like many other employers, certainly believed this when, in 2006, it began requiring employees to sign...more

Tenth Circuit Holds FAA Preempts New Mexico Law On Unenforceability Of Unconscionable Arbitration Provisions

On January 28, the U.S. Court of Appeals for the Tenth Circuit held that the Federal Arbitration Act (FAA) preempts New Mexico common law that a compulsory-arbitration provision in a contract may be unconscionable and...more

Compelling Individual Arbitration Violates National Labor Relations Act? It Does According to ALJ

Joining the ever growing list of opinions on the arbitrability of class claims, an NLRB Administrative Law Judge recently ruled that an arbitration agreement that did not expressly bar workers from bringing class or...more

D.R. Horton on Steroids: NLRB Invalidates Arbitration Agreement Without Class Waiver

As reported previously here, the National Labor Relations Board (“NLRB” or the “Board”) in D.R. Horton, Inc., 357 NLRB No. 184 (2012), held that requiring employees to enter into an arbitration agreement containing a...more

D.R. Horton Still Alive: NLRB Judge Says Employer’s Intent to Compel Employees to Waive Class Claims Renders Arbitration Clause...

Although the Circuit Courts of Appeals that have addressed the issue currently stand united in the view that class arbitration waivers in individual employment contracts do not violate the National Labor Relations Act...more

NLRB Standing (read “Expanding”) Ground on D.R. Horton

In the controversial 2012 decision D.R. Horton, Inc., the NLRB held that mandatory arbitration agreements requiring all employment disputes to be resolved through individual (as opposed to class) arbitration violate NLRA §...more

Incorporating Arbitration Agreements By Reference: The Key Is Reasonable Notice

In recent months, three federal circuit courts have confronted this question: can a defendant compel arbitration even in the absence of a signed written agreement containing an arbitration clause? The answers were yes, no,...more

D.R. Horton and the Arbitration Hotchpotch: Emerging “Rules” and the Future of Compelled Arbitration in California

Last December, the Fifth Circuit issued its long-awaited decision in D.R. Horton, Inc. v. NLRB, holding that employers may require employees to sign arbitration agreements categorically waiving the right to pursue employment...more

Financial Services Law -- Jan 17, 2014

Community Banks and the Volcker Rule: What’s Next? - For now, banks that have investments in CDO securities that are issued by funds that are invested in trust preferred securities (TruPS CDOs) have dodged a bullet. On...more

Which Arbitration Agreement Clauses Will Texas Courts Find Unconscionable?

In recent years, courts have consistently supported employers’ use of arbitration agreements in employment settings. During the last few terms, the Supreme Court of the United States has issued several decisions, such as...more

CFPB Report Targets Arbitration Clauses

The Consumer Financial Protection Bureau (the “CFPB”) is a new federal agency responsible for regulating consumer financial products and services. On December 12, 2013, the CFPB released a report on the use of arbitration...more

CFPB’s Preliminary Report: Financial Consumers Can Only Avoid Arbitration By Using A Credit Union

Say it’s twenty degrees below zero outside, and you’d already seen boiling water turn into “snow” immediately upon making contact with the air, what would you do next? Assuming you were all caught up on your Words With...more

The Easiest Arbitration Agreement To Avoid May Be The One Between Attorney And Client

The First and Ninth Circuits recently issued opinions concerning the validity of state laws requiring “informed consent” to, or “full disclosure” of, arbitration clauses in attorney retainer agreements. Although the First...more

CFPB Releases Study on Arbitration Clause

Following its field hearing on arbitration, the CFPB released its preliminary research on the use of arbitration clauses in connection with consumer financial products and services. Section 1028 of the Dodd-Frank Act required...more

Business Litigation Reporter

We are pleased to introduce the inaugural issue of Goodwin Procter’s Business Litigation Reporter. This unique publication provides timely summaries of key cases and other developments within dedicated Business Litigation...more

CFPB Builds its Case Against Arbitration Clauses

INTRODUCTION - The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) mandated a Consumer Financial Protection Bureau (CFPB) study on the use of pre-dispute arbitration clauses in consumer...more

New York Federal Court Interprets Reinsurance Contract’s Arbitration Provision and Transfers Venue to Massachusetts

First State Ins. Co. v. Nat’l Cas. Co., No. 13 Civ. 0704 (AJN), 2013 U.S. Dist. LEXIS 142518, 2013 WL 5439143 (S.D.N.Y. Sept. 27, 2013). A cedent and a reinsurer were parties to various reinsurance agreements, each of...more

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