Ninth Circuit Issues First Ruling Interpreting Ending Forced Arbitration Act
In-house counsel responsible for employment, consumer, and litigation strategy at companies that use mandatory arbitration clauses must review this ruling, as it is the first appellate interpretation of the Ending Forced Arbitration Act and clarifies which claims are exempt from forced arbitration requirements.
The U.S. Court of Appeals for the Ninth Circuit issued the first ever appellate decision interpreting the federal Ending Forced Arbitration Act, a statute that prohibits mandatory arbitration clauses for many employment discrimination, sexual assault, and consumer protection claims. The ruling resolves key ambiguities around the scope of the Act’s exemptions, including which types of claims qualify and whether the Act applies to arbitration clauses in both employment and consumer contracts. In-house counsel should review the decision to assess whether their company’s existing mandatory arbitration provisions cover claims that are now unenforceable under the Act, and update contract templates and dispute resolution policies accordingly.