Many employers, for good reason, dread the expense, complications and risks associated with employee class-action lawsuits. For example, wage and hour litigation, a hotbed for class-action lawsuits, increased in 2014, rising from 7,882 cases filed in 2013 to 8,066 cases filed in 2014. And although the numbers are not yet in for 2015, most experts anticipate a similar increase.
Fortunately for employers, courts across the country (including the United States Supreme Court) increasingly support employers’ ability to enter into individual arbitration agreements with employees, in which the employer and employee agree that any disputes that may arise between them, such as a wage and hour dispute, will be resolved through binding arbitration, rather than the courts. In addition, parties can also include a class-action waiver, mutually agreeing that neither party will seek litigation or arbitration in a class setting. Such agreements benefit both parties, since arbitration is generally faster, cheaper and less stressful than traditional litigation, and allows the parties to resolve their disputes in a less adversarial and timely forum.