Texas Employment Arbitration Agreement

In some cases, companies may use arbitration clauses to limit class actions. The U.S. Supreme Court has widely supported the use of arbitration clauses and has allowed companies to include clauses leading to the abandonment of class actions. For example, in 2011, the U.S. Supreme Court ruled that the Federal Arbitration Act (FAA) anticipated certain state laws that have the ability to invalidate an arbitration clause on the grounds that the arbitration clause is ruthless because it contains a waiver of class actions. A recent decision of the U.S. Fifth Circuit Court of Appeals, Kubala v. Supreme Production Services, Inc., 2016 WL 3923866 (5th Cir. July 20, 2016), illustrates the dangerous legal situation that many Texas workers face when it comes to forced arbitrations. In this case, an oilfield worker sued his employer, claiming that overtime pay had been illegally denied to him and other employees, as required by the FLSA. Two days after the complaint was filed and before the employer claimed to have knowledge of the case, the employer announced that anyone who continues to work for the company will be subject to a “new arbitration directive regulating all labour law disputes.” In response to his dismissal, Nelson filed a lawsuit against his former employer in the District of Texas.

Watch House then filed a motion to force arbitration. In his opposition to Watch House`s application, Nelson argued that his arbitration agreement was not enforceable, in particular because it was submitted, inter alia, to In re Halliburton Co., 80 S.W.3d 566 (Tex. 2002) and Lizalde v. Vista Quality Markets, 746 F.3d 222 (5th Cir. 2014) is illusory. The employee objected to arbitration for several reasons and stated that she had only limited english, that she did not remember signing the document, and that she felt that the documents her employer was asking her for (including this agreement) were merely formalities. She also stated that she thought she should sign it as a condition of her employment. The Court of Justice rejected the company`s request to impose arbitration and the company appealed. . . .

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