Wyatt Employment Law Report

Kentucky Supreme Court Limits Employers’ Ability to Enter Arbitration Agreements with Employees

By Marianna Michael

agreement-coffee-content-1076815Within the first week of October, the Kentucky Supreme Court issued its opinion in Northern Kentucky Area Development District v. Snyder NO. 2015-CA-001167 (Ky. Aug. 27, 2018). The court faced the decision of whether the Federal Arbitration Act (“FAA”) preempted KRS 336.700. Ultimately, the court held that: (1) employers may not condition employment on entering into arbitration agreements and (2) the FAA does not preempt KRS 366.700(2).

In this case, Danielle Snyder brought suit against her former employer, the Northern Kentucky Area Development District (“NKADD”). NKADD is a public agency that provides social programs to eight Kentucky counties. It hired Snyder on the condition that she enter into an arbitration agreement. The agreement required Snyder to resolve all disputes with NKADD through arbitration and not through the courts. Snyder was given the option to reject the agreement within five days of accepting it, but the rejection would end her employment with the company. She accepted the condition and worked for NKADD until Continue reading

Leave a comment

Supreme Court Affirms Arbitrator’s Holding That Contract Permitted Class Relief

The U.S. Supreme Court on June 10, 2013, issued its decision in Oxford Health Plans v. Sutter, 569 U.S. ___, No. 12-135 (2013), holding unanimously that once an arbitrator decides that a contract permits a class arbitration proceeding, the parties are bound by that decision under the Federal Arbitration Act’s very narrow scope of judicial review. In this commercial arbitration case involving a healthcare provider’s claim against a medical plan, Justice Kagan, speaking for the Court, stated, in part:

“Because the parties ‘bargained for the arbitrator’s construction of their agreement,’ an arbitral decision ’even arguably construing or applying the contract’ must stand, regardless of a court’s view of its (de)merits. Eastern Associated Coal Corp. v. Mine Workers, 531 U. S. 57, 62 (2000) (quoting Steelworkers v. Enterprise Wheel & Car Corp., 363 U. S. 593, 599 (1960); Paperworkers v. Misco, Inc., 484 U. S. 29, 38 (1987)…. Only if ‘the arbitrator act[s] outside the scope of his contractually delegated authority’—issuing an award that ‘simply reflect[s] [his] own notions of [economic] justice’ rather than ‘draw[ing] its essence from the contract’—may a court overturn his determination. Eastern Associated Coal, 531 U. S., at 62 (quoting Misco, 484 U. S., at 38). So the sole question for us is whether the arbitrator (even arguably) interpreted the parties’ contract, not whether he got its meaning right or wrong.”

Significantly, the cases relied upon by the Court in this commercial arbitration case were prior labor and employment law decisions.

Leave a comment

U.S. Supreme Court Vacates State Court Decision That Had Refused to Allow Arbitration of Dispute Over a Non-Competition Agreement

By Edwin S. Hopson

The U.S. Supreme Court has just issued a decision re-affirming the supremacy of the Federal Arbitration Act over state laws purporting to limit arbitration.  In Nitro-Lift Technologies v. Eddie Lee Howard, et al., 568 U.S. ____ (2012), the court reversed the Oklahoma Supreme Court that had taken the position that a state law limiting the enforcement of non-competition agreements entered into by employers and their employees controlled as a matter of state law. The Oklahoma court had refused to allow the matter to be heard by an arbitrator as called for in the contract between Nitro-Lift and two of its employees who left to go to work for a competitor. The U.S. Supreme Court, in a Per Curiam opinion, vacated the Oklahoma Supreme Court decision and remanded the case to the state court with instructions to allow the issue of whether the non-competition agreement had been violated by the former employees to be heard by an arbitrator.

Leave a comment

Supreme Court Confirms Company’s Right to Prohibit Class Action Claims Being Litigated Under an Arbitration Agreement

By Edwin S. Hopson

On April 27, 2011, in a 5 – 4 decision, authored by Justice Scalia and joined in by Chief Justice Roberts, and Justices Kennedy, Thomas and Alito, the U.S. Supreme Court in AT&T Mobility LLC v. Concepcion, 563 U.S. ____ (2011), held that the Federal Arbitration Act (“FAA”) preempted California law holding that an arbitration provision that disallowed class action proceedings was unconscionable and unenforceable.  Justices Breyer, Ginsburg, Sotomayor and Kagan dissented.  Although the underlying case was commercial in nature, this decision has significant ramifications in the employment law arena in light of the fact that many employers require employees to sign on to arbitration agreements or programs that limit the types of disputes that can be litigated in court or before administrative agencies.  Indeed, Justice Scalia relied in part on and cited Gilmer v. Interstate/Johnson Lane Corp., 500 U. S. 20, 33 (1991) which allowed age discrimination claims to be arbitrated.   Also, this case could have application to collective bargaining agreement arbitration provisions as well.

Leave a comment

Employment Cases Pepper U.S. Supreme Court Docket

By Kim Koratsky

            As the first Monday in October looms on the horizon, we ponder what the new U.S. Supreme Court term means for employers.  Labor & employment cases are certainly the majority of cases on federal dockets nation-wide.  Likewise, the U.S. Supreme Court will be considering a number of employment-related cases this term.  Among those cases are:

  • Kasten v. Saint-Gobain Performance Plastics Corp.:  Testing whether oral complaints to a supervisor are protected under the anti-retaliation provisions of the Fair Labor Standards Act.
  • Thompson v. Northern American Stainless L.P.:  Whether Title VII creates a cause of action for third party retaliation for persons who did not themselves engage in protected activity.
  • Staub v. Proctor Hospital:  Can employer be held liable based on the unlawful intent of officials who caused or influenced but did not make the ultimate employment decision (cat’s paw theory)?
  • AT&T Mobility v. Concepcion:  Whether Federal Arbitration Act preempts state unconscionability law
  • Chamber of Commerce of the United States v. Whiting:  Preemption of Arizona statute that imposes sanctions on employers who hire unauthorized aliens.
  • (Cert. Pending) Wal-Mart Stores v. Dukes:  Whether certification of a huge class action was proper.

Leave a comment

Supreme Court Expands Enforcement of Arbitration Clauses Calling for The Arbitrator To Decide Arbitrability Issues

By Edwin S. Hopson

The U.S. Supreme Court on June 21, 2010, in a 5 to 4 decision in Rent-A-Center, West, Inc. v. Antonio Jackson, 561 U.S. ____ (2010), expanded the reach of clauses in arbitration agreements that provide for the arbitrator to resolve questions of arbitrability when the challenge is to the enforceability of the entire agreement.

  Continue reading