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Could recent court decisions affect collective filings against employers?

Many people in Indiana, when they sign their terms of agreement with a new employer, they hardly read them all; the fine print generally gets skimmed over which could turn into a nasty legal battle, especially if your employer specifically places a provision in your contract that restricts how you can file lawsuits against the company for whom you are employed.

Two recent court decisions, which were based on a previously decided case, could create difficulties down the road for such employees that do have this provision in their contracts. And with a split decision, some are wondering if the U.S. Supreme Court could get involved in the future.

Both decisions were based on the case D.R. Horton which held that an employer violated the National Labor Relations Act (NLRA) when it required employees to sign an agreement that precluded them from filing joint, class, or collective claims regarding wages, hours or other working conditions against the employer in any forum, arbitral or judicial.

In the first case out of Texas, several employees collectively sued their former employer because they felt that their employer had violated the Fair Labor Standards Act by compensating them on a fluctuating workweek basis. In response, their employer filed motions requesting that the court dismiss the action, pointing out that the companies alternative dispute resolution program, or ADR, prevented employees from filing class, collective, or representative actions against the company.

Because of the court's interpretation of the D.R. Horton case, the judge ruled in favor of the company, deciding to uphold the enforcement of arbitration agreements as written.

But in another court decision, which chose to uphold the decision made in D.R. Horton, could create further contentions in the court system in the future. In this case, the National Labor Relations Board issued a complaint against an employer, stating that the use of these arbitration waivers is clearly in violation of employees' rights to file suit against unlawful business practices.

This time, the courts ruled against the company. Despite their best intentions, this decision seems to have muddied the waters for similar future lawsuits. Though the U.S. Supreme Court has not had to step in at this point, many critics feel that if something isn't done to resolve this matter, then there will likely be no end to the litigation over this issue.

Source: Mondaq.com, "United States: Board And Courts Clash Over D.R. Horton," Amy Littrell Esq, Nov. 14, 2012

For more information on employment disputes, please check out the link provided.

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