A recent announcement from the U.S. Department of Labor (DOL) highlights the agency's growing interest in curbing illegal provisions in mandatory arbitration agreements.
"Because mandatory arbitration is on the rise, there are more workplaces where [DOL's] Office of the Solicitor provides the only viable avenue for meaningful legal recourse, particularly where state and local laws are weak," the DOL's announcement said. "As part of our focus on equity, we seek opportunities to enforce the rights of workers who often cannot do so themselves, including workers subject to mandatory arbitration agreements and class-action waivers."
Today, at least 60 million U.S. workers are subject to mandatory arbitration, and these workers bring 98 percent fewer claims under the Fair Labor Standards Act (FLSA), compared with those not subject to mandatory arbitration, the DOL stated.
"Given the financial hurdles individuals face in bringing individual lawsuits and the fact that arbitration clauses often bar employees from participating in the more cost-effective class-actions, the DOL is announcing its intent to be more active in prosecuting" violations in arbitration clauses, said Amory McAndrew, an attorney with Hoguet Newman Regal & Kenney in New York City.
"I see this as part of a broader trend of restricting the types of claims that can go to arbitration," said Robyn Aversa, an attorney with Jackson Lewis in Berkeley Heights, N.J.
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