Employers should consider requiring jury trial waivers for employees. Arbitration agreements in the employment context have been used by employers for years to avoid having to publicly litigate employment related claims filed against them by employees.
Mandatory arbitration agreements normally require that if an employee wants to pursue a legal claim against their employer, either during employment or after, the dispute will be subject to mandatory arbitration instead of pursuing the claim through a lawsuit in the court system. To date, with a few exceptions, courts have routinely upheld the enforceability of these arbitration agreements related to employment claims when challenged.
In March 2022, the law concerning the enforceability of mandatory arbitration provisions changed when President Biden signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 which amended the Federal Arbitration Act (FAA).
Specifically, the FAA was revised to include new language providing that mandatory arbitration provisions would be deemed invalid in certain circumstances, including when a sexual harassment claim is alleged. As a result of this amendment, employees subject to mandatory arbitration agreements concerning employment claims may now elect to file a sexual harassment claim in court whereas previously they could have been required to arbitrate the sexual harassment claim.
This exception from arbitration only applies to sexual harassment claims and not workplace harassment claims based on other protected characteristics (i.e. race, religion). Furthermore, claims alleging discrimination, including sex discrimination, are not subject to the exception and can be required to be arbitrated if there is a valid arbitration agreement. Likewise, nothing in the amendment prohibits the parties from agreeing to arbitrate after the alleged sexual harassment claim arises. But, a pre-claim arbitration agreement will not be upheld.
Given this development, employers should consider whether or not to implement a jury trial waiver provision in their application and/or employment agreement. Avoiding a jury trial concerning a legal claim filed against an employer by an employee can have several benefits.
In non-jury trials, a judge is the fact finder as opposed to a jury. Generally, juries tend to be friendlier to employees rather than employers in employment related disputes. The same is not true of judges. Non-jury trials also tend to be shorter and therefore less costly than jury trials.
Florida courts have upheld jury trial waivers by employees. If an employer wants employees to agree to waive the right a jury trial, it should be made conspicuous in the application or agreement. This can be achieved by making the provision a stand-alone provision, in distinctive font and in plain language.
Additionally, the provision should be mutual and either near the signature line or initialed by employee. Drafting the waiver with these tips in mind will increase the chances of it being upheld against a challenge that the employee did not knowingly sign the provision.
Finally, notably, neither a mandatory arbitration agreement nor a jury trial waiver has any impact on an employee’s ability to file a claim with a government agency. An employee still must comply with any administrative requirements (including filing a Charge of Discrimination, if applicable) prior to proceeding with either arbitration or a court case.
If you have any questions about whether a jury trial waiver or arbitration provision would work for your company or questions concerning its drafting and implementation, you should contact labor and employment attorney Anne Chapman at 941.748.0100.