Today’s Tip: Do Look Back, When Drafting Arbitration Agreements

“Don’t Look Back” was the title track on Boston’s second album, released in 1978. The album version came in at six minutes, but a radio edit brough it down to four.

This is a practice I never understood. People used to listen to the radio for hours at a time, but six minutes was too long for one song? Why is it better to ingest two three-minute songs per six minutes than one six-minute song? But maybe I’m the wrong person to ask. My idea of an excellent album is Tales from Topographic Oceans by Yes. The album consists of four songs, each about 20 minutes long, and was inspired by a footnote in a book about Hindu texts by the yogi Paramahansa Yogananda.

But this is getting way off track.

I chose “Don’t Look Back” as the theme for today’s post because it’s good advice for life, but bad advice for drafting arbitration agreements.

For businesses that make widespread use of independent contractors, one of the best strategies for protecting against misclassification claims is by having a robust arbitration agreement with a class action waiver. But too many times those agreements don’t look back.

Lately I’ve seen a couple of decisions in which arbitration agreements were found not to cover particular claims, when those claims arose from events that happened before the agreement was signed. I think those cases were wrongly decided, since arbitration covers the process for resolving disputes, regardless of when they arise. But it makes good sense to draft in a way that cuts off this line of attack.

I have recently started adding a sentence to my arbitration agreements that goes something like this: “Covered disputes also include disputes relating to past events, including those that predate this Agreement.”

Today’s tip is to go back and look at your arbitration agreements. If they aren’t clear about covering claims based on earlier events, consider adding this clarification next time you update the agreement.

Now for those of you who would like an earworm for the day, here you go:

Don't look back, ooh, a new day is breakin'
It's been too long since I felt this way
I don't mind, ooh, where I get taken
The road is callin', today is the day

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© 2023 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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