Mandatory Arbitration of Employment Claims: Is It Still Worth It?
The debate over mandatory arbitration provisions in employment agreements has always assumed that arbitration clauses favor employers. However, the most recent developments in a wage-and-hour case against fast-food restaurant chain Chipotle Mexican Grill have called that assumption into question. As news reports about the case have suggested, Chipotle’s push to enforce its arbitration provision may have unintended consequences — “Chipotle’s Mandatory Arbitration Agreements Are Backfiring Spectacularly” (Huffington Post, 12/20/ 2018) and “Chipotle May Have Outsmarted Itself by Blocking Thousands of Employee Lawsuits Over Wage Theft” (Los Angeles Times, 01/04/2019).
Gina Roccanova, Chair of Meyers Nave’s Labor and Employment Practice Group, published an article in The Recorder to help employers understand the federal district court’s decision in Turner v. Chipotle Mexican Grill, Inc. (Case No. 1:14-cv-02612-JLK) and how the ruling impacts the calculation of the pros and cons of individual arbitration over collective actions in court. As Gina concludes in her article, “Given the factors, both inside and outside of the courtroom, many employers are narrowing their arbitration provisions or abandoning them altogether. While a well-crafted arbitration provision that applies only to wage-and-hour cases and clearly prohibits collective actions may still be worth the effort at least outside of California, the advantages of arbitration provisions may continue to diminish.” Please click here to read Gina’s article.