Construction disputes often involve voluminous amounts of discovery, including documents in the hand of third parties, points out Matthew DeVries in Burr & Forman’s Best Practices Construction Law blog.

If the case is subject to arbitration, it is likely there will be a dispute about whether the arbitrator has the authority to compel production of third-party documents or witnesses for deposition, he writes.

DeVries discusses a case in which the 11th Circuit  concluded that Section 7 of the Federal Arbitration Act precludes all pre-hearing discovery from non-parties.

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The 2019 Texas legislature enacted a new Property Code Section 5.152 to protect mineral and royalty owners from a certain species of fraudulent transactions perpetrated on trusting and/or naïve and/or out of state mineral owners, reports Charles Sartain in Gray Reed’s Energy & the Law blog.

The change is meant to address a scam in which someone “fronting for a company with a name similar to a reputable operator, would approach the owner with an oil and gas ‘lease’ of minerals or royalty that were already subject to an existing lease. Except that the lease was actually the sale of the mineral or royalty interest at a bargain price.”

The article lists the changes addressed by the new section.

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A California Court granted a defendant’s motion to compel arbitration based on a duly formed and consented arbitration clause via a “clickwrap” agreement, despite the plaintiff’s argument that no contract was ever formed because the purpose of the contract was to facilitate the selling and distribution of marijuana, which is illegal under federal law.

A post by Womble Bond Dickinson describes a case in which the defendant was hit with a putative class action in California federal court claiming it violated the Telephone Consumer Protection Act.

The defendant’s terms of service, which were hyperlinked in the sign-up box, contained a clause providing for arbitration of disputes with a class-action waiver.

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To reduce the risk of a class action disrupting business operations and impacting revenue, businesses may want to consider including arbitration clauses in their employment and consumer agreements, advises Patrick K. Burns in a blog post for PilieroMazza PLLC.

Many businesses include arbitration clauses in employment and consumer agreements in an attempt to shield themselves from class action lawsuits, he explains. “The success of these types of clauses in accomplishing the same largely depends upon its wording, the respective jurisdiction, and the nature of the underlying agreement.”

In his post, he demonstrates how, if class arbitration is not explicitly addressed in an arbitration agreement, it cannot be compelled.

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The U.S. District Court for the District of the Virgin Islands recently compelled arbitration after concluding that a personal guaranty incorporated an arbitration agreement from an underlying contract and rejecting various arguments to the contrary, reports Carlton Fields’ Reinsurance Focus.

The case involved a leasing agreement that contained an arbitration provision, but the personal guaranty did not. The personal guaranty did, however, provide that the “performance of any and all financial obligations of the Lessee to the Lessor … subject to the terms and conditions contained in the … Leasing Agreement.”

The court found that the plain language of the personal guaranty incorporated the arbitration provision from the leasing agreement.

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Bloomberg Law reports that law students from elite universities protested outside DLA Piper offices in three cities Oct. 10, calling on the firm to drop arbitration agreements from employee contracts.

“Demonstrators from Harvard, Columbia, NYU and Georgetown law schools handed out leaflets in New York, Washington, and Boston,” writes Bloomberg’s Stephanie Russell-Kraft. “They’re part of a student-led initiative leveraging their status as top Big Law recruits to fight what they says is ‘harassment and discrimination in the legal profession.’”

DLA Piper partner Vanina Guerrero, who claims she was sexually assaulted and retaliated against by a fellow partner, said she is unable to bring those claims in court because of a mandatory arbitration agreement.

Read the Bloomberg Law article.

The California Supreme Court invalidated a mandatory arbitration agreement involving a former employee’s wage claims, finding the agreement was both procedurally and substantively unconscionable, according to a Ford Harrison post by partner Frederick L. Warren.

“The Court found that the arbitration agreement’s execution involved a high degree of procedural unconscionability,” explained Warren. “The Court stated that ‘the agreement appears to have been drafted with an aim to thwart, rather than promote, understanding.'”

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Three recent court decisions raise a few issues to keep in mind for employers to keep in mind when drafting arbitration agreements for employees, according to a post on Bradley Arant Boult Cummings’ Labor & Employment Insights blog.

The authors, Bridget Warren and Anne R. Yuengert, discuss the common characteristics that an agreement should include.

They also advise drafters to include class and collective action waivers and how to update existing agreements to include such a waiver while a lawsuit is pending.

Finally, they advise paying attention to state laws that affect what can be included in the arbitration agreement.

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A post in the Burns Levinson In-House Advisor blog takes a look at the use of multi-tiered pre-litigation dispute resolution clauses in contracts.

Author Shepard Davidson writes that the theory behind such mechanisms “is straight-forward and quite laudable: if the parties can resolve a dispute without resorting to litigation or arbitration, they likely will save themselves a lot of pain, anxiety and, most of all, money. In reality, however, forcing people to engage in settlement discussions may actually cause one party or the other to lose substantive rights.”

He concludes that forcing parties to engage in a process that only can work if all of them want to participate seems unlikely to result in anything other than delay and added expense.

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A recent federal court decision reminds employers that an employee’s electronic acceptance of an arbitration agreement may not, by itself, be enough to prove that the employee has agreed to arbitrate, points out Stokes Wagner post.

In Shockley v. PrimeLending, the U.S. Court of Appeals for the Eighth Circuit recently affirmed the lower court’s decision to deny the employer’s motion to compel arbitration where the arbitration agreement was signed via the employer’s automated intranet system.

The author, Jordan A. Fishman, discusses the reasons that acceptance via intranet system was insufficient.

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The U.S. Chamber of Commerce and other business and employer groups have just submitted amicus briefs calling on the 9th Circuit to reconsider decisions that, in the views of these amici, eviscerate mandatory arbitration provisions, writes Alison Frankel in a Reuters report.

The briefs come in the wake of the 9th Circuit’s June 28 rulings in which plaintiffs claimed they couldn’t be forced into arbitration because they sought injunctions against corporate defendants.

The court found that because California’s policy of allowing consumers to pursue public injunctions does not specifically obstruct arbitration, it’s not precluded by the Federal Arbitration Act.

Read the Reuters article.

Posting an arbitration section in your employee handbook may put an employee on notice of a company policy or “offer,” of which the employee could be said to be “generally aware,” but it might not, without more, establish that there is an agreement to arbitrate, pints out Gilbert A. Samberg for Mintz, Levin, Cohn, Ferris, Glovsky and Popeo.

There must be evidence of the employee’s acceptance, he explains in a post on the firm’s website.

He illustrates his point with a case from the Eighth Circuit, concluding: “An employer needs to be able to prove acceptance by each employee of an ‘offer’ of arbitration.”

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On the heels of the Supreme Court’s recent pro-arbitration pronouncements, the U.S. Court of Appeals for the Eighth Circuit issued a reminder that, although agreements to arbitrate are favored under the law, arbitration agreements must still be contracts, writes Susan Fitzke for Littler Mendelson.

“In order to enforce an agreement to arbitrate, therefore, the employer must prove that a valid contract to arbitrate was created,” she explains. “This may seem self-evident, but in an era where some arbitration programs are contained only in employee handbooks or on-line, this is a point worth closer review.”

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If a contract is too one-sided, it can be ruled illusory and unenforceable, warns Shepard Davidson in the Burns Levinson In-House Advisor blog.

That is exactly what happened to the defendant in McNamara v. S.I. Logistics, Inc. when it tried to enforce its contractual right to arbitration he writes.

In that case, the defendant sought to compel arbitration based on an agreement that  purported to grant the company the unilateral right to modify its terms without any prior notice to McNamara, a former affiliate.

The court found in favor of McNamara, finding that the agreement was illusory.

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The United States Supreme Court has agreed to resolve a key issue in international arbitration agreements: whether the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards permits a non-signatory to an arbitration agreement to compel arbitration against a signatory to arbitration based on the doctrine of equitable estoppel.

A post on the Harris Bricken China Law Blog points out that the question has split the circuit courts, meaning that now the answer to the question depends on where in the United States the dispute is being litigated.

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Two recent court decisions dealing with mandatory arbitration agreements highlight why some manufacturers may gain by requiring pre-dispute employment arbitration agreements, writes Matthew Miklave for the Robinson+Cole Manufacturing Law Blog.

He discusses two federal court rulings favoring individual arbitration over litigation.

In one of the cases, the Second Circuit Court of Appeals reversed a lower court and found that a union labor contract which contained a clause requiring the arbitration of all disputes between the union represented employees and the employer prevented an employee from bringing an individual claim in federal court.

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The Eighth Circuit recently ruled that an employee was not subject to the employer’s arbitration agreement, including a delegation clause. The agreement was contained in an employment handbook addendum, which was available to the employee electronically.

Henry Allen Blair, writing for Arbitration Nation, discusses the case in a post about the ruling in Shockley v. PrimeLending.

Blair cites the court’s opinion, which states that “[w]e are aware of no legal authority holding that an employee’s general knowledge or awareness of the existence of a contract constitutes the positive and unambiguous unequivocal acceptance required under Missouri law.”

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When arbitration awards resolving contract claims are not based on the actual provisions of the relevant contracts, but rather on an individual arbitrator’s personal sense of “justice” and “public policy,” they can be successfully challenged, and vacated by the courts, points out Robert J. Kaler in a post for Holland & Knight.

He discusses a case in which an arbitration award purported to remedy an alleged breach of and “failure of consideration” for the owner’s underlying network operator agreement with the plaintiff’s subsidiary by rewriting that agreement so as to materially change its financial requirements.

A court subsequently vacated the award, finding that the arbitrator exceeded his powers by voiding the guaranty of the parent company while re-writing the terms of the operating agreement.

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The Ninth Circuit upheld the district court’s grant of a motion to compel individual arbitration in a case that “tests the outer limits of what constitutes a ‘reasonably conspicuous’ provision” in an online contract, according to Ballard Spahr.

The article says Holl v. United Parcel Service, Inc. “contrasts with prior Ninth Circuit rulings, arguably involving less extreme facts, which denied motions to enforce online arbitration clauses. Holl, however, was decided on a petition for mandamus, a remedy that requires the petitioner to establish clearly and indisputably that ‘extraordinary circumstances’ exist to overturn the district court’s decision.”

The class action complaint in Holl alleged that UPS systematically overcharged its retail customers.

Companies with online terms of use that include an arbitration clause must still exercise great care in designing the website so that users become contractually bound to arbitrate, the firm advises.

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Holland & Knight offers some tips for preparing a memorandum of understanding or similar agreement executed at the conclusion of the mediation.

Authors Gregory R. Meeder and Lisa M. Kpor explain:

“An agreement reached at the conclusion of a mediation session typically represents an abbreviated version of a formal settlement agreement that will be entered into by the parties at a later date. Occasionally, however, parties are unable to finalize the comprehensive settlement agreement, and the terms of the memorandum of understanding become vital to resolving related disputes.”

The discuss seven important points to cover in drafting the memorandum.

Read the article.