One of last month’s legal developments on which we report below is a decision by a federal court in New Jersey that should serve as a reminder to companies: arbitration clauses need to be drafted well in order to succeed. New Jersey courts for many years have been perhaps the most finicky in the country when reviewing language informing their workers that they are waiving their rights to have a court or jury decide their claims. As we observed in a 2021 blog post, plaintiffs’ class action lawyers bringing independent contractor misclassification claims have succeeded on occasion in punching holes in arbitration clauses with class action waivers. As we remarked in an extensive blog post on the subject in 2018: “Whether an arbitration agreement in an independent contractor or employment setting will bar a class action depends as much on the wording in the arbitration clause as the applicable law, which is in flux and continues to evolve. That reality strongly suggests that existing arbitration clauses used in independent contractor agreements should be reexamined and updated periodically in tandem with the company’s effort to enhance its compliance with laws governing the use of independent contractors.” Companies seeking to elevate their IC compliance and avoid class action misclassification lawsuits by the use of arbitration agreements with class action waivers have effectively used a process such as IC Diagnostics (TM) to accomplish these objectives.
