The so-called arbitration agreement in Kubala included a “delegation clause.” The clause means that it applies not only to the content of a worker`s dispute (i.e. whether or not the employer has breached the FLSA), but also to all matters relating to the applicability of the arbitration agreement itself. As a result, the court said, the case must go to arbitration, so that the arbitrator (not the court) can decide whether the agreement requires Kubala to disclose his claims in the circumstances of this case. (Of course, the private arbitrator will have financial incentives to decide that the case should be decided by arbitration, not by a judge.) I first wrote about the NLRB`s decision that pre-litigation arbitration agreements renouncing the law, claims as part of a group action violated federal labor law in January 2012 (post). At the time, I thought it was wise for employers to wait for the result of the inevitable call that… However, unlike a voluntary arbitration procedure – in which the parties agree after a dispute to submit to arbitration rather than the courts – employees are obliged to agree to submit any future litigation to arbitration. In many cases, if they do not sign the agreement, they do not get the job. The employer has all the bargaining power and the only option for the employee is to accept the employer`s terms. The court began its analysis by finding that arbitration agreements are governed by contract law and that both parties must voluntarily consent to mediation.
In order to compel another party to settle its claim, the court held, the party requesting arbitration must prove 1.) there is a valid arbitration agreement, and 2.) that the law is within the framework of the agreement. If the party aspiring to arbitration can do so, the charge moves to the other party to defend itself. On February 12, the Fair Play Arbitration Act 2009 (H.B. 1020) was introduced by Le Rep. Hank Johnson (D-Ga). The law aims to make pre-litigation conciliation agreements illegal in employment contracts as well as certain consumer and franchise contracts. Voluntary arbitration agreements in one of these three areas have remained valid and legal. April 1, 2009 (p.
931) introduced by Sen. Russ Feingold (D-Wis) to the Senate. Both bills are currently in committee. The employee refused arbitration for several reasons and explained that she had only limited knowledge of English, that she did not remember signing the document, and that she felt that the documents her employer was asking for (including this agreement) were pure formalities. She added that she thought she should sign it as a condition of her employment. The court rejected the company`s request to force arbitration and the company appealed. In this regard, the Court of Appeal found that the agreement was applicable because there was sufficient evidence that SKEPOA wished to be bound by the arbitration agreement and that the agreement did not contain language indicating that the signing of SKEPOA was a condition of the validity of the agreement. The court justified this decision by the fact that a blank signature block alone does not stipulate that a signature is a precondition for the implementation of the agreement.
In addition, the Tribunal found that the language of the arbitration agreement preceding the signature line did not indicate that the parties` signatures meant that they agreed to be legally bound by the terms of the contract. On the contrary, in that case, the agreement simply stated that the signatures constituted an “acknowledgement”. In addition, the SKEPOA clearly relied on the arbitration agreement and took unrealistic steps to implement it.