Courts Generally Enforce Agreements to Arbitrate Employment Disputes But Not Poorly Drafted Ones.
Employers are increasingly requesting employees to arbitrate all employment disputes as a condition of employment or continued employment. Courts generally enforce such agreements pursuant to the liberal federal policy (under the Federal Arbitration Act) favoring arbitration agreements. In Walthour v. Chipio Windshield Repair LLC. (March 21, 2014), the Eleventh Circuit U.S. Court of Appeals joined other federal courts in holding that employees may even enter into arbitration agreements that waive their right to bring collective actions under the FLSA (federal wage and hour law). However, courts refuse to enforce poorly drafted arbitration clauses where, for example, employees are asked to waive rights without adequate consideration, where an employer retains a unilateral right to modify the agreement without notice and where the agreement purports to restrict some non-waivable substantive right. In Hernandez v. Colonial Grocers, Inc. (October 25, 2013), Florida’s Second District Court of Appeals refused to enforce an arbitration agreement where the arbitration clause was drafted to require the losing party to pay for all attorneys’ fees. The Hernandez court reasoned that the arbitration clause infringed upon the employee’s substantive right (under the FLSA) not to be exposed to paying the employer’s attorney’s fees.
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