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ADA, Arbitration Among Employment Law Issues Before Supreme Court

Now that Justice Brett Kavanaugh has been sworn in, there is a full slate of justices on the U.S. Supreme Court. Their new term began Oct. 1, and the court jumped right in to hear oral arguments about an age discrimination case.

Other cases before the court involve the drafting and enforceability of arbitration agreements. Those have been a hot topic recently due to the court's May decision in Epic Systems Corp. v. Lewis, which upheld their use in employment contracts. Here are some previews:

Does the Age Discrimination in Employment Act apply to small public employers?

The Age Discrimination in Employment Act (ADEA) applies to private employers with 20 or more employees and to states, state agencies and interstate agencies. Due to a quirk in the way the law is written, however, it's not entirely clear whether Congress meant to apply the law to all such agencies or only those with 20 or more employees.

In a case involving an 11-person fire department, the 9th Circuit ruled that the ADEA applies to all state agencies, regardless of size. The 6th, 7th, 8th and 10th circuits have ruled that the 20-employee threshold applies to agencies.

Does a bland arbitration clause bar class action suits?

In an upcoming case, the court will consider whether an arbitration agreement that merely states "arbitration shall be in lieu of any and all lawsuits or other civil legal proceedings" is sufficient to bar employee class action lawsuits. A group of employees attempted to bring a class action against the employer in a data breach case.

California law applied in the case and, in California, contracts are interpreted against the drafting party when disputes arise. The defendant argues that the contract should have been interpreted using the Federal Arbitration Act and Supreme Court precedent.

Either way, clearer drafting could have prevented the dispute.

Do independent contractors have 'contracts for employment'?

The Federal Arbitration Act provides an exception for "contracts of employment" involving workers engaged in interstate commerce, such as commercial truckers. The exception shields such employees from mandatory arbitration agreements.

New Prime Inc. v. Oliveira seeks to determine whether that exception applies to independent contractors, who technically contract for work and are not considered employees. The drivers argue that the term "contracts for employment" has traditionally been employed to describe both employees and independent contractors, a view that would extend the exception to contractors. The trucking company believes the law allows it to use arbitration clauses in contracts involving contractors.

We'll keep an eye on these cases. If you have questions about any of these issues, an employment law attorney would be happy to discuss them with you.

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