Kentucky: State Supreme Court Bars Mandatory Arbitration Agreements

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September 27, 2018

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In Northern Kentucky Area Development Dist. v. Snyder, the Kentucky Supreme Court stated that mandatory arbitration agreements violate KRS § 336.700; moreover, the law prohibits employers from refusing to hire or terminating employees on the condition that they waive any existing rights they would otherwise have against the employer. There, an employee claimed she was terminated in violation of the state’s Whistleblower Act. Because she signed a mandatory arbitration agreement, the employer unsuccessfully sought to enforce it. As a result, all employers should immediately have their arbitration agreements reviewed, updated, and re-signed by current employees, as applicable.

Action Items

  1. Have arbitration agreements updated consistent with this new ruling and confer with legal counsel on having current employees resign the agreement.
  2. Update offer letters to exclude condition of employment based on executing an arbitration agreement.
  3. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2018 ManagEase

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