In a recent decision that could have broad effects on employment arbitration, the Supreme Court of the United States ruled that parties cannot be compelled to submit to class arbitration absent a specific agreement to do so. In Stolt-Nielson S.A., et al., v. Animalfeeds International Corp., a shipping company entered into a contract with its customers, which included an arbitration clause that was silent on the issue of class arbitration. The parties concurred that they had reached "no agreement" on that issue. Under those circumstances, the Court concluded that the parties cannot be compelled to submit their dispute to class arbitration. The Court specifically stated that it was not deciding, on the facts before it, what contractual basis would support a finding that the parties agreed to authorize class-action arbitration. However, one thing is clear - the parties' silence on class arbitration will not suffice. Although this particular case involved a commercial contract, its implications certainly extend to arbitration agreements between employers and employees. Given the recent surge of wage and hour and other class action claims by employees, employers should carefully review their arbitration agreements to determine if there is language to support a finding that the parties agreed to authorize class-action arbitration.
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