The United States District Court of Maryland, in Caire v. Conifer Value Based Care, dealt a major blow to employers who utilize forced arbitration clauses. Employers often attempt to include mandatory arbitration clauses in employment agreements. Mandatory arbitration agreements require that the parties to the agreement resolve any disputes before a private arbitrator, rather than in court. This is generally bad for employees because it denies them many of the procedural safeguards afforded in court, such as discovery or the right to appeal. In Caire an employee alleged violations of the Family Medical Leave Act and the Americans with Disabilities Act, as well as other statutes. In response, the defendant tried to enforce a signed arbitration agreement. The court ruled in favor of the employee, finding that the arbitration agreement was one sided and benefited only the employer, without binding the employer into arbitration. In support of its decision the court noted three facts. First, the court rejected the defendant’s argument that the employee’s working at the job was sufficient consideration to make the arbitration agreement valid. Second, the court found that the agreement was binding only on the employee, while the employer was free to change the terms of the agreement at will. Finally, the court found it unconscionable that there was no mechanism for selecting a neutral arbitrator in the arbitration agreement. This ruling is a major win for employees and it sends a message to employers that for binding arbitration agreements to be valid, they must be fair to both sides. The law regarding arbitration agreements can be complicated, however, the attorneys at Lebau & Neuworth are experienced in dealing with such issues and we may be able to help. For more information, contact us.
