Arbitration agreements, representative waivers, and severability: a cautionary tale

A well-drafted arbitration agreement is crucial to ensuring claims arising from an employment relationship will be resolved by final and binding arbitration. It's equally important, however, that you ensure your arbitration agreement waives only claims that can be legally waived and contains a valid, broad severability provision.

Arbitration agreement

Nichole Kec was a territory manager for R.J. Reynolds from 2012 through 2016. The company classified her position as exempt. During her employment, she signed an arbitration agreement that stated both she and the company would arbitrate employment-related disputes. Section 5 of the agreement stated:

The Parties waive the right to bring, join, participate in, or opt into, a class action, collective action, or other representative action whether in court or in arbitration.

Section 5 further stated, "This Section . . . may not be modified or severed . . . for any reason."

Section 16 of the arbitration agreement contained both a general severability provision and an exception for Section 5, to which a purported "blow-up" provision attaches instead: