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May 30, 2019 Practice Points

Kentucky Legislature Overrules Snyder Decision

A new law reaffirms an employer’s right to use arbitration agreements.

By Jay Inman

On March 25, 2019, Kentucky Governor Matt Bevin signed into law a bill that reaffirms an employer’s right to use arbitration agreements. The law amends two state statutes: KRS § 336.700 and KRS § 417.050 to make clear that an employer may require an employee to agree to arbitration as a condition of employment.

This legislative development was a direct reaction to the decision of the Kentucky Supreme Court in Northern Kentucky Area Development District v. Snyder, Case No. 2017-SC-00277, which is reported on this website. In Snyder, the court held that KRS § 336.070 bars employers from requiring mandatory arbitration as a condition of employment. In a ruling that has been widely questioned, the court rejected the argument that the Federal Arbitration Act preempted Kentucky law. 

The Kentucky legislature reacted quickly to the Snyder decision, concerned that Kentucky might be the only state where employers could not require arbitration as a condition of employment. The new law, which also contains safeguards for employees in the arbitration process, applies retroactively rendering the Snyder decision impotent in future cases.  

Jay Inman is a shareholder of Littler Mendelson P.C. in Lexington, Kentucky.

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