Arbitration Agreements

Restore Kentucky's Arbitration Agreement Law!

Why It's Needed

  • In October 2018, the Kentucky Supreme Court issued a sweeping ruling that all arbitration agreements between employers and employees in Kentucky are null and void if they were a condition of getting or keeping a job.
  • With this decision, Kentucky is the first state in the nation to prohibit employers’ use of mandatory arbitration agreements as a condition of employment.
  • Arbitration agreements are a contract between the employer and employee to resolve any potential conflicts outside of court.
  • Arbitration agreements are commonplace among employers and benefit employees by resolving conflicts cheaper and more efficiently than litigating in court.
  • The Kentucky Supreme Court challenged controlling federal law (Federal Arbitration Act) and with its opinion invalidated an employer’s arbitration agreements.

About Senate Bill 7

  • Senate Bill 7 clarifies the statute on which the Supreme Court ruled.
  • Senate Bill 7 will restore the right of employers to have arbitration agreements upon hiring an individual.
  • In addition, Senate Bill 7 ensures the rights of employers and employees to agree to rehire an employee during pending litigation, agree to a modified period of limitations when permitted under the applicable law, and clarifies that a candidate for employment can provide consent for a background check prior to hiring when federal or state law requires prior consent.

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