Employment law attorneys Jim Shore and John Dudrey were quoted in Law360’s “Employment Authority” in an article titled “Dems’ Bid To Ban Workplace Arbitration Faces Uphill Fight,” published August 5, 2021. (Subscription required.) The article discusses proposed legislation revived by Democrats in the U.S. House of Representatives that if passed would ban mandatory arbitration clauses that prevent workers from bringing various types of employment claims in court.
Earlier bills proposed by democrats sought to limit the use of arbitration agreements, but the “Restoring Justice for Workers Act,” said by its sponsors to be a response to a 2018 U.S. Supreme Court decision that upheld the enforceability of mandatory arbitration clauses, may be even more unpopular with employers and their allies. Shore and Dudrey said that while the proposal may have a chance in the House, they see little chance of its approval by the current Senate.
“It’s going to be seen as limiting what the business community would view as a much cheaper system for dispute resolution and open the door to a lot more class actions,” Shore said.
Dudrey noted that the growth of mass individual arbitrations, in which many individual claims are filed against a single company by employees otherwise prevented from litigating collectively by class waivers in mandatory arbitration agreements, has soured some employers on the Supreme Court’s decision. The Restoring Justice for Workers Act would affect in large part only those that continue to use mandatory arbitration agreements.
“For companies that think arbitration is worth doing, this would have a profound effect,” he said. “For those that don’t really care about it, I don’t know that it would matter a whole lot.”