Arbitration Clauses in a San Diego Employment Agreement

Arbitration Clauses in a San Diego Employment Agreement – Disputes

What does an employer need to know about arbitration clauses in a San Diego employment agreement?  Arbitration clauses were standard components of any employment agreement in California for decades.  These clauses provided for mandatory arbitration in the event of many disputes including wage and hour claims, harassment and/or discrimination.  Recent legislation and a Supreme Court of the United States (SCOTUS) Case have substantially changed the legal landscape and substantially increased the risk for San Diego employers.

Even though substantial legal challenges to California’s “AB 51” and the SCOTUS decision regarding “Epic Systems v. Lewis” are still underway, an additional decision by the California Supreme Court in a case which is known as the Dynamex decision may complicate matters further.

The Epic Systems case actually consolidated three FLSA cases with disputes regarding employment agreements which require bilateral or “individual” arbitration clauses of any resulting disputes.  This important decision reinforces the law behind the FAA and requires courts across the United States to enforce these arbitration agreements according to the specific terms of each unique agreement.  This applies to arbitration clauses in a San Diego employment agreement which call for “individual arbitration proceedings” versus the potential consolidation of arbitrations into a class action.

The ability to codify individual arbitration in employment agreement can serve as one effective layer of defense against the recent Dynamex decision and the huge financial implications of misclassification.

The Epic Systems decision may impact contractual provisions of individual arbitration in PAGA related cases, but Epic Systems did not resolve those questions under California law.  Presently, PAGA cases may not be individually arbitrated.  However, many experts believe the SCOTUS decision in Epic Systems may strengthen California employers to ensure arbitration agreements are mandatory for all employees.

The Watkins Firm has used this strategy as part of it’s general business counsel and employer defense work for quite a while.  We work with our clients to develop enforceable agreements which work to minimize employer exposures while limiting employee’s options for expensive disputes and litigation.  To learn more about the Epic Systems decision and arbitration in San Diego we invite you to review the strong recommendations of our clients and the legal industry and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.

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