News Flash: Federal Court Orders Employer To Stop Requiring Employees To Sign Arbitration Agreements

The controversy over the use of mandatory arbitration for employment disputes continues as federal and state courts send contradictory signals to employers. While the California Supreme Court recently OK’d the use of mandatory arbitration, the federal Ninth Circuit Court of Appeals has said that for some types of claims, such as age or race bias, mandatory arbitration agreements violate federal law. In a new development, a federal judge in Los Angeles has blocked the law firm of Luce, Forward, Hamilton & Scripps from demanding that its employees sign arbitration agreements. The ruling resulted from a lawsuit brought by the Equal Employment Opportunity Commission on behalf of a legal secretary who claimed he was fired after he balked at signing the law firm’s arbitration clause. Luce Forward has said the firm would probably appeal the decision as a test case to challenge the Ninth Circuit’s position on mandatory arbitration because it conflicts with both California law and federal circuits in other states.