Employee litigation is a growing threat to business survival. A recent case shows franchise owners how to draft an employee arbitration provision which courts will uphold.
Reversing Judge Scheindlin, the 2d Circuit Ct of Appeals says that repeated failure to disclose serving as a "neutral" on a related case does not warrant vacatur of the arbitral award.
Lawsuits and arbitrations often sort out disputes in their legal sense. They rarely sort out disputes in a satisfactory personal or financial sense. Anyone familiar with the litigation and arbitration process can tell you about how unsatisfactory the result was in most instances. They cost a fortune.
In a 5-4 decision of AT&T Mobility LLC v. Concepcion, No. 09-893 (April 27, 2011), the U.S. Supreme Court held that arbitration agreements in standard form contracts that waive the right to pursue a class action are enforceable, and that the Federal Arbitration Act, 9 U.S.C. § 1, et seq., preempts a California court ruling to the contrary.
Congress is still considering the arbitration fairness act, which could include a provision banning mandatory arbitration in franchises. This hasn't gained a lot of traction in the franchisee world because the thinking behind it is fundamentally misguided.
Glenn E. Davis of Gallop, Johnson & Neuman Secures $472,000 Arbitration Award for Medicine Shoppe International in Franchise Dispute Affirmed by Eighth Circuit Court
