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Employment Arbitration Agreements: Class Action Waivers

Get key takeaways from the U.

S. Supreme Court decision in Epic Systems, and what this means for employers going forward.Many employers require that their employees, as a condition of employment, agree to resolve employment-related disputes through mandatory arbitration. Quite often, those arbitration agreements also contain provisions -- known as class action waivers -- that prohibit the employee from pursuing any such claims on a class, joint, or collective basis. Prior to May 21, 2018, employers faced uncertainty regarding the enforceability of class action waivers in the employment context. Indeed, the U.S. Circuit Courts of Appeal were split on the issue, leaving nationwide employers in the unenviable position of having to determe corporate policy on a jurisdiction-by-jurisdiction basis. That was, however, until the U.S. Supreme Court issued its 2018 decision in Epic Systems Corp. v. Lewis, in which it held that the Federal Arbitration Act mandates the enforcement of class and collective action waivers contained in employment-related arbitration agreements. Having cleared this first hurdle, employers are left to consider open questions including: how to enforce class action waivers when faced with putative class action claims in court; how to draft class action waivers and arbitration agreements designed to reduce the risk of enforceability challenges; and, at a fundamental level, whether to include arbitration agreements and class action waivers in new employment agreements or to enforce waivers in existing agreements. This content will address the legal, practical, and public policy considerations that all employers must consider in answering these questions. This material will explore the Supreme Court's decision in Epic Systems Corp., and review the history that led to it, as well as other legal principles governing arbitration agreements and class action waivers. The topic will also provide guidance on practical issues facing employers, including how to draft effective and enforceable class action waivers, how to limit the risk of challenges to such waivers, and how to enforce waivers in response to class or collection actions filed in court. Finally, this content will delve into the public policy and practical business considerations that an entity must balance to determine whether to require its employees to agree to individual arbitration in the first place. This topic is essential for individuals attempting to lead their businesses and clients through the developing and often controversial subject of mandatory arbitration agreements and class action waivers contained therein.

Runtime: 96 minutes
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Why Lorman?

Over 33 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Agenda

Introduction to Arbitration: The Basics

  • Arbitration: What Are the Benefits?
  • The Federal Arbitration Act (FAA)
  • Class Arbitration vs. Individual Arbitration
  • Class and Collective Action Waivers

The Enforceability of Class Action Waivers in Arbitration Agreements

  • Enforceability of Class Action Waivers
  • Class Action Waivers in Employment Agreements: History of the Circuit Split and Tension Between the FAA and the National Labor Relations Act (NLRA)
  • Supreme Court Resolves the Circuit Split: Discussion of Epic Systems Corp. v. Lewis

Enforcing Class Action Waivers in the Courts

  • Motions to Compel Individual Arbitration
  • Waiver of Right to Compel Arbitration Through Litigation Conduct
  • Who Decides Threshold Questions of Arbitrability

Drafting Arbitration Agreements and Class Action Waivers in Employment Agreements

  • Choosing the Form of the Arbitration Agreement
  • Crafting Explicit Waiver of the Right to Pursue Class Claims, Joint Claims, and Other Collective Actions in Court and in the Arbitral Forum
  • Including Certain Arbitration Provisions to Reduce the Risk of State Law Challenges
  • Specifying the Arbitral Forum and Applicable Rules of Procedure to Be Applied
  • Delegating Questions of Arbitrability: Authority Given to the Arbitrator or the Court?

Mandating Arbitration for Employees: Public Policy and Practical Considerations

  • Benefits of Class Action Waivers and Arbitration:
    • Limits Exposure to Class Action Litigation and Potentially High Damages Awards
    • Provides Confidentiality in Individual Settlements and Arbitration Results to Reduce Risk of Copycat Lawsuits
    • Offers Streamlined Procedures and Quicker, LessCostly Resolution of Claims
  • Potential Negatives of Class Action Waivers and Mandatory Arbitration Agreements for Employees
    • Limited Appellate Options
    • Negative Press Attention
    • Ability to Recruit and Retain Top Talent
  • Balancing Potential Positive and Negative Attributes of Class Action Waivers Is an Entity- and Business-Specific Decision
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Over 33 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Credits

OnDemand Course

This course was last revised on October 24, 2018.

Call 1-866-352-9540 for further credit information.

This program does NOT qualify, nor meet the National Standard for NASBA accreditation.

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Why Lorman?

Over 33 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Faculty

Mark D. Pomfret

Mark D. Pomfret

K&L Gates LLP

  • Partner in the Boston office of K&L Gates LLP and leader of the Boston labor and employment group
  • Practice focuses on labor and employment law on management side, with significant experience in employment litigation, employment counseling, employment training and employment transactional matters. Regularly assists clients in preparing arbitration agreements, assessing various arbitration provisions, and prosecuting and defending claims in arbitration
  • Written and spoken to local, regional and national audiences on numerous areas of employment law, including the use of arbitration agreements, as well as harassment, discrimination, wage and hour, Family and Medical Leave Act, and restrictive covenants
  • J.D. degree, University of Notre Dame Law School, 992; B.A. degree, Middlebury College, 1987
  • Can be contacted at [email protected] or (617) 261-3147
Robert W. Sparkes, III

Robert W. Sparkes, III

K&L Gates LLP

  • Partner in the Boston office of K&L Gates LLP
  • Practice emphasizes all aspects of complex civil and commercial litigation, with a primary focus on defending consumer finance related and other class action litigation in federal and state courts throughout the United States and representing clients in arbitration matters, including pursuing motions to compel arbitration in trial and appellate courts; advising consumer-finance and mortgage lending entities in connection with government inquiries and investigations; and counseling clients in connection with compliance with various financial services and consumer protection laws and regulations
  • Author of several publications and regular speaker on topics related to the areas of class action litigation, arbitration, the enforceability of class action waivers in arbitration agreements, consumer financial issues, consumer institution and financial services litigation and compliance, commercial lending, and other related issues
  • J.D. degree, Boston University School of Law, 2005; B.A. degree, Stonehill College, 2002
  • Can be contacted at [email protected] or (617) 951-9134
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Product ID: 404361
Published 2018
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