Arbitration Reigns Supreme
May 23, 2018


The U.S. Supreme Court on Monday ruled that employers could block employees from banding together as a class to fight legal disputes in employment arbitration agreements.  In a 5-4 decision, Justice Neil Gorsuch delivered the majority opinion that affects tens of millions of private sector employees and affirms that workers may not band together to challenge violations of federal labor law.  Employees who sign employment agreements to arbitrate claims must do so on an individual basis, including wage and hour claims.



The Supreme Court case centered around clauses in employment contracts that require employees to resolve disputes through arbitration, and precludes them from joining with others to file class action lawsuits.  It pitted two federal laws against each other.  The Federal Arbitration Act of 1925 allows for compulsory and binding arbitration.  However, the plaintiffs argued that class action waivers violate the National Labor Relations Act (NRLA), which protects workers’ rights to bargain collectively.  The court ruled that the Federal Arbitration Act supersedes the NLRA.



Attorneys estimate that anywhere from hundreds to thousands of federal and state lawsuits or arbitration claims were on hold, awaiting the Supreme Court ruling.  Now those may continue to move forward by arbitrating them one employee at a time.  Businesses may also be re-examining cases where a court ruled a waiver is not enforceable.  The long-term ramifications will be gradually determined as businesses decide whether to include class action waivers in their employment contracts.



Although some companies have recently announced that they would eliminate arbitration agreements in sexual harassment cases, the court’s decision will likely have implications for the #MeToo movement, as well as other civil rights class actions claiming discrimination based on race, gender, and religion.  Currently, there’s legislation in Congress that would eliminate arbitration clauses in employment agreements in sexual harassment and gender discrimination cases.  We’ll keep an eye on the midterm to see if this will flip.


Too Hot to Handle


Hawaii’s Kilauea Volcano on the Big Island has been spewing lava and toxic gases since May 3.  When President Donald Trump declared a major disaster in Hawaii on May 11, Gov. David Ige estimated that the cost to protect residents could exceed $2.9 million over the next month.  Now, the lava is threatening its power supply, the Puna Geothermal Venture.  Ten of the eleven wells have been quenched, which is the second step to securing the wells after they are shutdown.  Lava is also destroying its number one industry – tourism, with lost revenue rising to $222 million.



Damage from the “ring of fire” weather system in mid-May is expected to result in $2.5 billion in property and automotive insurance claims.  The report estimates that 12 states, including Colorado, Connecticut, Illinois, Indiana, Iowa, Kansas, Maryland, Michigan, New York, Ohio, Pennsylvania, and Virginia, will see insured losses in excess of $100 million.  On the other side of the U.S., an Oregon judge ordered that the 15 year old boy who admitted to starting the major wildfire in the Columbia River Gorge pay $36.6 million in restitution.


Making Our Way Around the Country


Rep. Gus Bilirakis and Rep. Ron Kind introduced legislation to improve the Medicare Secondary Payer (MSP) and Medicaid Third Party Liability (TPL) statute.  The Provide Accurate Information Directly Act (PAID Act) will require the Centers for Medicare & Medicare Services (CMS) to coordinate benefits between settling parties, Medicare Advantage Plans, Part D Prescription Drug Programs, and Medicare Plans by disclosing plan information to all settling parties at the time of settlement.  The bill is meant to streamline the process of settling claims and providing funds more quickly to beneficiaries. 



The Industrial Commission of Arizona (ICA) issued a substantial policy statement on accepting medical only claims.  Beginning Aug. 20, insurance carriers and self-insured employers will have to start using Form 104 “Notice of Claim Status” instead of the informal notated notification list.  Carriers and self-insured employers are already submitting Form 104 for lost time claims and the Commission stated that it’s in the ICA’s and stakeholders’ interests to require all reports on the same form for accepted claims since a copy of the form is sent to the employee as well.



OSHA is moving forward to finalize changes to its crane operator certification requirements publishing a proposed rule in the Federal Register.  Previously, OSHA mandated crane operators become certified for both the type of crane used and the lifting capacity.  In the newly proposed rule, OSHA is seeking to drop the capacity requirement that never went into effect and expand the type of certification for crane operators.  The proposed rule also reinstates an employer’s duty to ensure the crane operator is qualified to control the machinery safely.  Comments on the proposed rule are due June 20.



Memorial Day marks the unofficial start of summer and nearly 42 million Americans will kick off the season traveling this Memorial Day weekend.  This is expected to be the highest number in nearly 12 years.  Let’s put our cell phones and drinks down as each day in the U.S., approximately nine people are killed and more than 1,000 injured in crashes reported to involve a distracted driver.  Don’t forget to take a moment and remember those who’ve died while serving our country.


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