Many employers require that employees agree in writing to arbitrate any disputes that may arise in connection with their employment. The reason is simple: arbitrating employment disputes usually is less expensive and provides a quicker resolution than litigation. However, like litigation, arbitration can sometimes be unpredictable. This presents a problem because, unlike litigation, it is difficult to appeal an arbitration decision. Thus, although employers generally favor arbitrating individual employee claims, they resist being forced to arbitrate claims brought by a class of employees (a class action claim).
But what if the employment agreement requiring arbitration of employment disputes is silent on the issue of class arbitration?
The Supreme Court has just ruled that arbitrators may not on their own decide that a case may be treated as a class action, answering in the antitrust context a matter of significance for employment matters. Under the Supreme Court’s ruling, if the arbitration agreement does not expressly provide for class actions, class action status may not be imposed. Still to be determined is whether the decision will apply to employment disputes, but the thinking here is that the sweep of the Court’s language pretty much dictates that conclusion.