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Class Action Waivers Employment Agreements

While the Supreme Court has not yet answered the question raised by D.R. Horton, there is another recent Supreme Court case that deals with the issue in a threatening manner. In June 2013, the Supreme Court American Express Co. ruled against Italian Colors Restaurant.22 The case alighted when a group of merchants filed a class action lawsuit alleging that American Express (AmEx) had imposed an illegal matching agreement on them in violation of Sherman`s Cartel Act. Each contract entered into by the dealer with AmEx contained a clause prohibiting the trader from bringing disputes in a forum other than arbitration and required that all disputes be settled on an individual basis. AmEx requested arbitration and the District Court granted the request. Traders claimed that reconciling the right to the agreement on an individual basis would cost hundreds of thousands of dollars, while the average recovery would be only $5,000. Therefore, they claimed that without the possibility of bringing a collective or collective action, they would lose their material rights. The Second Circuit has given its consent.23 Administrative authorities, including, but not limited to, the United States Equal Employment Opportunities Commission, the Pennsylvania Human Relations Commission, and the Department of Labor, have legal enforcement powers to investigate and prosecute violations of the statutes they have implemented. Administrative authorities with enforcement obligations should take the initiative to take legal action against large companies that have used binding arbitration agreements to guard against liability. Congress and lawmakers should ensure that authorities have the resources to take collective action.

Source: The “Colvin” dataset is based on all arbitration proceedings based on employer-promoted proceedings administered by the American Arbitration Association from January 1, 2003 to December 31, 2007. The data is compiled by Colvin from reports submitted by the AAA under the reporting obligations of the California arbitration service provider. Alexander J.S. Colvin, “An Empirical Study of Employment Arbitration: Case Outcomes and Processes.” Journal of Empirical Legal Studies 8 (1): 1-23 at 5 (2011). The process statistics “Eisenberg and Hill” are reported to Eisenberg, Theodore and Elizabeth Hill “Arbitration and Litigation of Employment Claims: An Empirical Comparison”. Dispute Resolution Journal 58 (4): 44-55 (2003). California`s lower federal courts have been inconsistent in their willingness to follow the Iskanian and prevent the forced abandonment of PAGA measures for employment. Some lower courts have done so, but many others have rejected Iskanian on the grounds that his reasoning and outcome were not consistent with Concepcion.33 However, on September 30, 2015, the Ninth Circle confirmed, in a split opinion, the result in Iskanian and refused to waive class actions on paga claims.34 It is likely that this case will be brought before the Supreme Court. . .

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