The majority of U.S. employers have elected to adopt the use of mandatory arbitration agreements, requiring that all employment-related claims be arbitrated and not litigated. Pursuant to a series of landmark United States Supreme Court decisions, such mandatory arbitration agreements are permissible and enforceable under the Federal Arbitration Act. Most such agreements contain class action waivers that the United States Supreme Court has also ruled are permissible and enforceable, meaning that such employment law claims can only be pursued on an individual basis and not on a group or class basis.
A number of states (i.e., California, New York, etc.) have attempted to enact state statutes that would prohibit or limit employers’ use of such arbitration agreements. These efforts have generally been held to be ineffective because they are preempted by the Federal Arbitration Act. Thus, the only way to legally limit the enforceability of such arbitration agreements would be to amend the Federal Arbitration Act that was enacted by Congress in 1925.
That is exactly what Congress recently voted to do. To learn more, continue reading here.