Are Arbitration Agreements From Employers Still Going to Be Enforceable In Nevada?
Wednesday, June, 26, 2013
Many employers have found that it's easy to avoid public lawsuits and manage disputes through arbitration when it comes to employee issues. It has become standard in several industries to include language in the initial employment contract articulating that arbitration is the required way to proceed.
A new Nevada law will be going into effect later this year and could affect employers with mandatory arbitration agreements. The law states that arbitration agreements in place prior to October 1st, 2013 are not subject to new requirements, except where they are renewed after that date. The law states that any arbitration agreements entered or renewed after the start of October can be void and unenforceable unless the employee has given their own consent for use of arbitration.
In order for employers who still want the provision to remain in their employment contracts to be considered valid under the law, employers will need to scrutinize their existing language and make corrections where necessary. For example, including a separate signature line under any section or sentence of the application/contract that mentions arbitration. Otherwise, employees may be able to argue that they didn't specifically "approve" any arbitration wording in the contract, which could make it void under the law.
Regardless of current reliance on arbitration wording in the contract, it's worth the time to review the current employment application and contract information and have it looked at by an attorney. Employment contracts should be regularly reviewed to reflect current information and laws existing in the state. As arbitration has become a preferred way for employers to mediate disputes with employees and former employees, it's expected that more attention overall will be given to the issue as well as the way agreements are structured. Employers would be wise to stay on top of the news and latest rulings to protect themselves.