Arbitration agreements between employers and employees are very common. As of 2018, an Economic Policy Institute poll estimated that 56% of private-sector, non-union employees were subject to such agreements. Based on recent developments in arbitration law, that figure has surely risen. Arbitration of employee disputes can carry with it certain advantages. Perhaps the primary reason that companies have arbitration agreements with their employees is because, unless such agreements are drafted specifically to include class or collective arbitration, they preclude class or collective treatment of claims. A properly drafted and executed arbitration agreement governed by the Federal Arbitration Act (FAA) is a powerful defense to employment-related collective or class actions.
To read the full text of this article by Duane Morris partner Travis Odom, originally published in Texas Lawyer, please visit the firm website.