Arbitration, in the context of United States law, is a form of alternative dispute resolution. Specifically, arbitration is an alternative to litigation through which the parties to a dispute agree to submit their respective positions to a neutral third party for resolution. In practice arbitration is generally used as a substitute for litigation, particularly when the judicial process is perceived as too slow, expensive or biased. In some context, an arbitrator may be described as an umpire.
Adair v. United States, 208 U.S. 161 (1908), was a US labor law case of the United States Supreme Court which declared that bans on "yellow-dog" contracts were unconstitutional. The decision reaffirmed the doctrine of freedom of contract which was first recognized by the Court in Allgeyer v. Louisiana (1897). For this reason, Adair is often seen as defining what has come to be known as the Lochner era, a period in American legal history in which the Supreme Court tended to invalidate legislation aimed at regulating business.
At-will employment is a term used in U.S. labor law for contractual relationships in which an employee can be dismissed by an employer for any reason, and without warning, as long as the reason is not illegal. When an employee is acknowledged as being hired "at will," courts deny the employee any claim for loss resulting from the dismissal. The rule is justified by its proponents on the basis that an employee may be similarly entitled to leave his or her job without reason or warning. The practice is seen as unjust by those who view the employment relationship as characterized by inequality of bargaining power.
An independent contractor is a person, business, or corporation that provides goods or services under a written contract or a verbal agreement. Unlike employees, independent contractors do not work regularly for an employer but work as required, when they may be subject to law of agency. Independent contractors are usually paid on a freelance basis. Contractors often work through a limited company or franchise, which they themselves own, or may work through an umbrella company.
United States labor law sets the rights and duties for employees, labor unions, and employers in the United States. Labor law's basic aim is to remedy the "inequality of bargaining power" between employees and employers, especially employers "organized in the corporate or other forms of ownership association". Over the 20th century, federal law created minimum social and economic rights, and encouraged state laws to go beyond the minimum to favor employees. The Fair Labor Standards Act of 1938 requires a federal minimum wage, currently $7.25 but higher in 28 states, and discourages working weeks over 40 hours through time-and-a-half overtime pay. There are no federal or state laws requiring paid holidays or paid family leave: the Family and Medical Leave Act of 1993 creates a limited right to 12 weeks of unpaid leave in larger employers. There is no automatic right to an occupational pension beyond federally guaranteed social security, but the Employee Retirement Income Security Act of 1974 requires standards of prudent management and good governance if employers agree to provide pensions, health plans or other benefits. The Occupational Safety and Health Act of 1970 requires employees have a safe system of work.
The United States Arbitration Act, more commonly referred to as the Federal Arbitration Act or FAA, is an act of Congress that provides for judicial facilitation of private dispute resolution through arbitration. It applies in both state courts and federal courts, as was held in Southland Corp. v. Keating. It applies where the transaction contemplated by the parties "involves" interstate commerce and is predicated on an exercise of the Commerce Clause powers granted to Congress in the U.S. Constitution.
In contract law, a non-compete clause, or covenant not to compete (CNC), is a clause under which one party agrees not to enter into or start a similar profession or trade in competition against another party. Some courts refer to these as "restrictive covenants". As a contract provision, a CNC is bound by traditional contract requirements including the consideration doctrine.
Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967), is a United States Supreme Court decision that established what has become known as the "separability principle" in contracts with arbitration clauses. Following an appellate court ruling a decade earlier, it reads the 1925 Federal Arbitration Act (FAA) to require that any challenges to the enforceability of such a contract first be heard by an arbitrator, not a court, unless the claim is that the clause itself is unenforceable.
Southland Corp. v. Keating, 465 U.S. 1 (1984), is a United States Supreme Court decision concerning arbitration. It was originally brought by 7-Eleven franchisees in California state courts, alleging breach of contract by the chain's then parent corporation. Southland pointed to the arbitration clauses in their franchise agreements and said it required disputes to be resolved that way; the franchisees cited state franchising law voiding any clause in an agreement that required franchisees to waive their rights under that law. A 7-2 majority held that the Federal Arbitration Act (FAA) applied to contracts executed under state law.
Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1 (1983), commonly cited as Moses Cone or Cone Hospital, is a United States Supreme Court decision concerning civil procedure, specifically the abstention doctrine, as it applies to enforcing an arbitration clause in a diversity case. By a 6–3 margin, the justices resolved a complicated construction dispute by ruling that a North Carolina hospital had to arbitrate a claim against the Alabama-based company it had hired to build a new wing, even though it meant that it could not consolidate it with ongoing litigation it had brought in state court against the contractor and architect.
Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001), was a United States Supreme Court case that concerned whether the "section one exemption" of the Federal Arbitration Act applied to an employment contract of an employee at Circuit City Stores. The Court held that the exemption was limited to the specific listing of professions contained in the text. This decision meant that general employment contracts, like the one Adams sued under, would have to be arbitrated in accordance with the federal statute.
14 Penn Plaza LLC v. Pyett, 556 U.S. 247 (2009), is a US labor law case in the United States Supreme Court on the rights of unionized workers to sue their employer for age discrimination. In this 2009 decision, the Court decided that whenever a union contract "clearly and unmistakably" requires that all age discrimination claims under the Age Discrimination in Employment Act of 1967 (ADEA) be decided through arbitration, then employees subject to that contract cannot have those claims heard in court.
Epic Systems Corp. v. Lewis, 584 U.S. ___ (2018), was a case decided by the Supreme Court of the United States on how two federal laws, the National Labor Relations Act (NLRA) and the Federal Arbitration Act (FAA), relate to whether employment contracts can legally bar employees from collective arbitration. The Supreme Court had consolidated three cases, Epic Systems Corp. v Lewis, Ernst & Young LLP v. Morris (16-300), and National Labor Relations Board v. Murphy Oil USA, Inc. (16-307). In a 5-4 decision issued in May 2018, the Court ruled that arbitration agreements requiring individual arbitration are enforceable under the FAA, regardless of allowances set out within the NLRA.
Altitude Express, Inc. v. Zarda, 590 U.S. ___ (2020), was a landmark United States Supreme Court civil rights case which ruled that under Title VII of the Civil Rights Act of 1964 employees could not be discriminated against on the basis of sexual orientation or gender identity.
R.G. & G.R. Harris Funeral Homes Inc. v. Equal Employment Opportunity Commission, 590 U.S. ___ (2020), was a landmark United States Supreme Court case which ruled that Title VII of the Civil Rights Act of 1964 protects transgender people from employment discrimination.
California Assembly Bill 5 or AB 5 is a state statute that expands a landmark Supreme Court of California case, Dynamex Operations West, Inc. v. Superior Court ("Dynamex"). In that case, the court held that most workers are employees, ought to be classified as such, and the burden of proof for classifying individuals as independent contractors belongs to the hiring entity. AB 5 entitles workers classified as employees to greater labor protections, such as minimum wage laws, sick leave, and unemployment and workers' compensation benefits, which do not apply to independent contractors. Concerns over employee misclassification, especially in the gig economy, drove support for the bill, but it remains divisive.
Bostock v. Clayton County, 590 U.S. ___ (2020), was a landmark United States Supreme Court civil rights case in which the Court held that Title VII of the Civil Rights Act of 1964 protects employees against discrimination because of their sexual orientation or gender identity.
Dynamex Operations W. v. Superior Court and Charles Lee, Real Party in Interest, 4 Cal.5th 903 was a landmark case handed down by the California Supreme Court on April 30, 2018. A class of drivers for a same-day delivery company, Dynamex, claimed that they were misclassified as independent contractors and thus unlawfully deprived of employment protections under California’s wage orders. Their claims raised the question of what the appropriate standard was to determine whether workers should be classified as employees or as independent contractors under California’s wage orders.
Lamps Plus, Inc. v. Varela, 587 U.S. ___ (2019), was a United States Supreme Court case regarding the use of class arbitration proceedings. In a 5-4 decision, the Supreme Court reversed the Ninth Circuit’s decision and held that arbitration on a classwide basis could not be compelled based on the provision’s ambiguous language. The Court relied on its previous decision in Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp. which held that class arbitration procedures could not be compelled without indication that the parties to the arbitration had agreed to these procedures.
Our Lady of Guadalupe School v. Morrissey-Berru, 591 U.S. ___ (2020), was a United States Supreme Court case involving the ministerial exception of federal employment discrimination laws. The case extends from the Supreme Court's prior decision in Hosanna-Tabor Evangelical Lutheran Church & School v. Equal Employment Opportunity Commission which created the ministerial exception based on the Establishment and Free Exercise Clauses of the United States Constitution, asserting that federal discrimination laws cannot be applied to leaders of religious organizations. The case, along with the consolidated St. James School v. Biel, both arose from rulings in the United States Court of Appeals for the Ninth Circuit that found that federal discrimination laws do apply to others within a religious organization that serve an important religious function but lack the title or training to be considered a religious leader under Hosanna-Tabor. The religious organization challenged that ruling on the basis of Hosanna-Tabor. The Supreme Court ruled in a 7–2 decision on July 8, 2020 that reversed the Ninth Circuit's ruling, affirming that the principles of Hosanna-Tabor, that a person can be serving an important religious function even if not holding the title or training of a religious leader, satisfied the ministerial exception in employment discrimination.
