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U.S. Supreme Court Reinforces Right to Arbitration

Last week, the U.S. Supreme Court reaffirmed the legality of the Federal Arbitration Act (“FAA”) and employer arbitration agreements in Kindred Nursing Centers, Inc. v. Clark.  This ruling from the nation’s highest court is undoubtedly a positive one for employers who wish to arbitrate disputes rather than going to court.

In Kindred, the U.S. Supreme Court overturned the Supreme Court of Kentucky, which had ruled that a nursing home’s arbitration agreement was invalid because the plaintiff’s power of attorney did not have specific authorization to enter into the arbitration agreement.  The U.S. Supreme Court, relying on the language of the FAA, and the Court’s subsequent cases regarding the Act, held that no state can single out arbitration agreements as disfavored in comparison to other contracts.  The Court was keen on emphasizing the language in the FAA that states an arbitration agreement must ordinarily be treated as “valid, irrevocable, and enforceable.”

This ruling is important for employers and employees who agree to rely on arbitration, rather than litigation, to resolve employment-related disputes.  The ruling makes clear that states cannot infringe on an employer’s right to insist on using arbitration to settle disputes.  For employers wishing to utilize arbitration, it is crucial to have a properly crafted agreement.  The attorneys at KDDK have years of experience in drafting, enforcing and defending arbitration agreements, as well as in arbitrating disputes.

For more information, please contact Mark McAnulty at mmcanulty@KDDK.com or (812) 423-3183; or contact any member of the KDDK Labor and Employment Law Practice Team.

About the Author

Mark A. McAnulty, a partner at Kahn, Dees, Donovan & Kahn, LLP, in Evansville, Indiana, practices labor and employment law, and is a member of the KDDK litigation, trials and appeals practice team. Licensed to practice in Indiana, Kentucky, Illinois, and Missouri, Mark has represented clients in administrative and judicial proceedings throughout the tri-state area. Mark counsels clients regarding hiring and disciplinary issues, as well as compliance with local, state and federal employment laws. Mark also works with clients in reviewing and drafting employment contracts, non-compete agreements, and employee handbooks; and has advised and represented employers in labor management and union avoidance matters.

(Jordan Heck, a law clerk for KDDK, contributed to this article.)

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