Texas Employers Should Beware of Efforts to Limit Mandatory Employment Arbitration
While there is no indication that the Texas legislature will seriously consider banning mandatory employment arbitration in Texas any time soon, the movement in other states to do so affects how multistate employers choose to proceed.
May 20, 2022 at 02:30 PM
5 minute read
A 2017 study conducted by the Economic Policy Institute concluded that about half of American private-sector employees are subject to some form of a mandatory agreement or provision for arbitration of legal disputes with [their employer]. Widespread use of mandatory arbitration agreements is directly traceable to the Supreme Court's 1991 decision in Gilmer v. Interstate/Johnson Lane Corp., which held enforceable an agreement by an employee to submit all statutory employment claims to arbitration. More generally, though, the Court's decisions on arbitration agreements in the employment context have in most cases aligned with the Court's broader approach generally favoring arbitration.
But as employer reliance on arbitration agreements has grown, so too has public sentiment opposing arbitration of workplace disputes. While this is not new, it is only within the past several years that opposition to employer-imposed arbitration agreements has gained meaningful traction. This article examines two recent developments that have the potential to reduce the number of workplace claims that may be compelled to arbitration and asks whether these developments are only early signs of a future in which arbitration of employment disputes is rarer than it is today.
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