Arbitration

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Q: In a unanimous opinion, the U.S. Supreme Court held that employers who do not act promptly to invoke an arbitration clause may be held to waive arbitration. What does this mean for my company?

A: As noted in our colleagues’ blog post, on May 23, in a unanimous opinion, the U.S. Supreme Court held that employers who do not act promptly to invoke an arbitration clause may be held to waive arbitration. In so holding, the Court resolved a circuit court split over whether a party arguing waiver had to demonstrate prejudice. The Court held that prejudice was not a requirement. The Court’s holding departs from its generally pro-arbitration holdings over the last 15 years.

Q.  Our company has a policy providing for mandatory arbitration of employment claims. I heard recently that some companies are moving away from these types of policies.  What are the pros and cons of requiring all employees to submit their employment claims to arbitration?

A.  There are a number of issues to consider regarding whether a company should require its employees to submit all employment claims to arbitration. These types of policies have been in favor since the 2018 United States Supreme Court opinion in Epic Systems Corp. v. Lewis, which endorsed mandatory arbitration agreements even where they resulted in employees waiving their rights to pursue claims in a class or collective action.

Q.  Are there any laws related to settlement of sex harassment claims in Maryland that I should be aware of?

A.  In response to the many high-profile scandals in the news, several jurisdictions have enacted anti-sexual harassment legislation. To date, Vermont, New York, and Washington passed anti-sexual harassment laws. Maine, North Carolina, Ohio, and New Jersey introduced similar statutes in state legislatures. The new legislation aims to reduce sexual harassment in the workplace by prohibiting waiver provisions in employment contracts, preventing non-disclosure and other provisions in sexual harassment settlement agreements, and providing new avenues for employee reporting and disclosure. Maryland is the latest state to say “#MeToo.”

Q.  Can my company require its employees to sign an arbitration agreement mandating that they arbitrate all employment disputes, and limiting their ability to participate in a class action against the company?

A.  On May 21, in a 5-4 opinion, the U.S. Supreme Court ruled that arbitration agreements in which…