Pennsylvania Employment Arbitration Agreement

Mandatory application and optional retroactivity. The RUAA applies to all arbitration agreements signed after July 1, 2019 and allows parties who have entered into agreements before that date to voluntarily agree to comply with the provisions of the RUAA. For arbitration agreements concluded before July 1, 2019 and for which the parties do not decide to be governed by the RUAA, the AAU will continue to apply. The litigation in this case a result of the worker`s resignation and the introduction of legal action against her former employer under Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act. During her employment, the worker had signed an agreement on "employment principles," which included mandatory arbitration provisions. When the employer attempted to dismiss the action and force arbitration, the Federal District Court struck down the "Legal Assistance and Fees" provision, which required each party to pay its own legal fees, regardless of the outcome of the agreement. Title VII and ADEA authorize the awarding of legal fees to a dominant party, the court found. The use of arbitration as a means of dispute resolution should not violate legal rights. Similarly, the complainant`s costs should not be prohibitive, which the regional court found prohibitive. As a result, the court ordered an arbitration procedure with the employer, which pays all legal fees and fees determined by the current law. When the applicant appealed because the entire agreement was invalid, the U.S. Court of Appeals for the Third Circuit considered the Pennsylvania State Law, which governs a contract containing an invalid provision.

The Third Circuit held that "the state arbitration policy at Lock-Step must be implemented under state law" and looked at the Pennsylvania law to determine whether the cost and royalty provisions were essential conditions of the entire agreement. In this case, the Tribunal would be required to invalidate the entire agreement. However, the Tribunal found that the primary purpose of the arbitration agreement was not to regulate legal fees or fees, but to provide a dispute resolution mechanism. Since the provisions in question were not essential contractual terms, Pennsylvania law allows for the application of the non-criminal part of the agreement. One of the current controversies over mandatory arbitration agreements in termination is whether workers may be required to share the costs of arbitration with their employers. The U.S.