Arbitration -- 2018

Five Star Senior Living, Inc. v. Mandviwala   (U.S. Supreme Court)

Federal Arbitration Act preemption of California claims

The NAM filed an amicus brief asking the U.S. Supreme Court to review and reject California’s rule prohibiting arbitration of Private Attorneys General Act (PAGA) claims. The California Supreme Court held that California public policy precludes enforcement of an agreement that requires PAGA claims be submitted to arbitration and that California’s policy is not preempted by the Federal Arbitration Act (FAA). While PAGA claims were once an afterthought tacked onto putative employment class actions in California, the number of PAGA filings has skyrocketed in recent years as plaintiffs seek to evade the enforcement of their arbitration agreements. If this is permitted to stand, representative PAGA claims will become even more common, resulting in the effective invalidation of millions of arbitration agreements that are governed by the FAA. The NAM's brief argues that arbitration agreements allow disputes to be resolved promptly and efficiently while avoiding the costs associated with traditional litigation. Such arbitration is speedy, fair, inexpensive and less adversarial than litigation in court. Unfortunately, the Court denied review.

Related Documents:
NAM amicus brief  (April 26, 2018)


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