arbitration Archives - EMPLOYEE BENEFITS BLOG

A Win for Employers: Ninth Circuit Holds That California AB 51 Prohibiting Mandatory Arbitration Is Pre-empted by the Federal Arbitration Act

by Maria C. Rodriguez, Laurie Baddon and Paulina Chau | Mar 28, 2023 | Employment, Labor

On February 15, 2023, employers in California regained the ability to enforce mandatory arbitration as the US Court of Appeals for the Ninth Circuit ruled that Assembly Bill 51 (AB 51), which prohibited “forced arbitration” as a condition of employment, was pre-empted by the Federal Arbitration Act (FAA).

After years of litigation, the Ninth Circuit’s ruling upholds a federal district court’s preliminary injunction that temporarily blocked California from enforcing AB 51 and all but guarantees that AB 51 will never be enforceable. While California could seek review from the Ninth Circuit (en banc) or the Supreme Court of the United States, given the Supreme Court’s line of cases upholding FAA pre-emption, we think this decision will stand.

That said, US President Joe Biden’s Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (HR 4445) must not be ignored. Employers may include sexual harassment and sexual assault claims in a voluntary arbitration agreement, but an employee may choose to file these particular claims in court.

ESOP Litigation: Latest Trends and Questions

by J. Christian Nemeth | Jul 6, 2022 | Employee Benefits, Employee Stock Ownership Plans (ESOPs), Fiduciary and Investment Issues, Retirement Plans

On May 6, 2022, McDermott Partner Chris Nemeth delivered a presentation during the 2022 TEA National Conference titled “ESOP Litigation: Latest Trends and Open Questions.” His presentation focused on recent significant employee stock ownership plan (ESOP) court decisions and emerging litigation trends in the ESOP industry. Chris and his co-presenter touched on the enforceability of arbitration clauses in the Employee Retirement Income Security Act of 1974 (ERISA) litigation, post-transaction debt forgiveness, and pleading and standing requirements.

For questions about employee benefits matters, please contact Chris or McDermott’s employee benefits practice team.

Tenth Circuit Compels Arbitration in Overtime, Joint Employer Case

by Rachel B. Cowen | Dec 28, 2021 | Employment, Labor

A recent US Court of Appeals for the Tenth Circuit ruling determined that a pipeline inspector’s Fair Labor Standards Act (FLSA) lawsuit against an energy company could not be adjudicated without involving the subcontractor that paid his wages. According to this Law360 article, the Tenth Circuit ruled that the inspector was trying to play “fast and loose with the courts” and using his subcontractor contract “to his advantage when it suits him and disavow it when it does not.” McDermott Partner Rachel Cowen represented the subcontractor.

Access the article.