NH Arbitration Agreements– Employers often require employees to enter arbitration agreements as a condition of employment, in order to ensure that the employee cannot sue the employer in court if the employer violates employment laws. Employees who have entered binding arbitration agreements with their employers must instead resort to arbitration to resolve any employment-related disputes. Arbitration is a process that deprives the employee of a jury trial and is usually a more favorable forum for the employer.
Are Arbitration Agreements Enforceable
Arbitration agreements are not always enforceable, however, as the First Circuit Court of Appeals clarified in its May 12, 2017, decision, Oliveira v. New Prime, Inc. In Oliveira, the plaintiff truck driver filed a class action against the defendant trucking company, alleging that the trucking company violated the Fair Labor Standards Act by failing to pay its truck drivers minimum wage. The trucking company moved to compel arbitration under the Federal Arbitration Act and to stay the proceedings. The trucking company also argued that the case should be dismissed because the plaintiff was an independent contractor, not an employee, and was therefore not entitled to the protections of the Fair Labor Standards Act.
The court had to consider two (2) questions: (1) whether an arbitrator or the Court should decide if the parties’ dispute was subject to mandatory arbitration; and (2) whether a provision of the Federal Arbitration Act that exempts employment contracts of transportation workers from the Federal Arbitration Act applies to a transportation worker agreement that characterizes a worker as an independent contractor rather than an employee.
The Court answered both questions favorably to the employee. First, the Court determined that the question of whether a mandatory arbitration clause is enforceable is one for the court, not the arbitrator. In other words, only a court can decide if an employee has entered an agreement that blocks the employee from accessing the court to resolve his employment-related dispute. It is not for an arbitrator to determine that the employee has lost his right to go to court to resolve his dispute. Only a court can make that decision.
Next, the Court determined that the transportation worker exemption in the Federal Arbitration Act applies to all transportation workers, regardless of whether they are classified as employees or independent contractors. In other words, transportation workers—regardless of whether they are employees or independent contractors—cannot be compelled to arbitrate their disputes with the companies for which they work. Transportation workers can go to court.
If you have a question about employee rights, you should contact an experienced employee rights lawyer such as Benjamin King at Douglas, Leonard & Garvey, P.C. Attorney King can be reached at 603-224-1988.