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Barbara Weltman

Big Ideas for Small Business, Inc.

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Waiver of arbitration?

June 8, 2022 / By Barbara Weltman

Some employers require employees to sign agreements that any labor disputes will be arbitrated and not litigated. A Taco Bell employee, who signed such agreement, nonetheless sued the employer for overtime violations, which the employer defended in court. Eight months after the suit was filed, the employer moved to compel arbitration to which the employee objected, arguing that by defending the suit the employer waived the right to arbitrate. Did the employee have to show prejudice in waiving the right? The U.S. Supreme Court unanimously ruled that prejudice isn’t required; only a showing that the party acted inconsistently with the right to arbitrate. #IdeaoftheDay

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Small business ideas, business tax news and small business consulting from Barbara Weltman to provide business owners with the information they need to succeed. Visit our small business blog, Idea of The Day®, small business books and articles on small business taxes, small business finance and small business legal advice.

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