Wage and Hour Wednesday – When is Arbitration the Answer for Employers?


Class and collective actions continue to increase under the FLSA and state wage and hour law. Arbitration agreements containing a class and collective action waiver can be an effective means of minimizing the risks of such lawsuits.

While many employers implemented arbitration programs in the wake of the Supreme Court’s Epic Systems decision in 2018, arbitration of employment disputes presents many pros and cons that should be considered Additionally, arbitration agreements must still be enforceable under state law and, therefore, should be carefully drafted and implemented.

Finally, the Biden Administration and many federal and state legislators have indicated an intention to ban mandatory employment arbitration, which would have far-reaching consequences for many employers that currently rely on such programs to mitigate the risks of class and collective action lawsuits.                                                       

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