supreme court

Forced Arbitration – New Supreme Court Decision – posted May 10, 2019

The issue of forced arbitration continues to be a hot topic. In a recent decision in the Lamps Plus v. Varela case, the Supreme Court Ruled that under the Federal Arbitration Act, an ambiguous agreement cannot be interpreted to mean that the parties agreed to class arbitration.

So what does this mean?  Before this ruling, arbitration agreements that did not specifically call for individual arbitration, could be interpreted to allow class arbitration.  Ambiguous contracts were historically construed against the drafter. Now, however, arbitrations that do not explicitly provide for class actions can be interpreted to require individual arbitration.

This represents another blow to US workers, who can be forced to sign away their rights to proceed as a group.

In her dissent, Justice Ruth Bader Ginsburg wrote, “the court has strayed from the principal that ‘arbitration is a matter of consent, not coercion.’” She added, “Employees and consumers forced to arbitrate solo face severe impediments to the ‘vindication of their rights.’” She also highlighted the fact that employees are required to face the decision or whether to accept the employer’s arbitration agreement or lose their job.

Getman, Sweeney & Dunn will continue to monitor and report on this issue. For additional information about forced arbitrations, you can see our posts from April 24, 2019 and May 23, 2018.

You can read the full opinion here.