On September 27, 2018, in Northern Kentucky Area Development District v. Danielle Snyder, the Kentucky Supreme Court held that an employer is prohibited from requiring an employee to enter into an arbitration agreement as a condition of employment within the state. As a result of Snyder, Kentucky became the only state in the nation to prohibit employers from terminating or refusing to hire an individual who would not agree to sign an arbitration agreement. (Jacqueline Pitts, Senate passes bill clarifying Kentucky’s policies on arbitration agreement, KY CHAMBER BOTTOM LINE, (Feb. 21, 2019).
Although Snyder allowed for employees to enter into arbitration agreements voluntarily, employers’ power to hire or terminate became limited. The Kentucky Senate, however, has now introduced a bill that would effectively reverse the Snyder case. In late February, 2019, the Kentucky Senate, sponsored by Senate President Robert Stivers, passed Senate Bill 7 – which helps clarify Kentucky’s arbitration statutes. See Pitts.
At its core, Senate Bill 7 restores an employer’s right to have arbitration agreements as a condition of employment. “In addition, Senate Bill 7 seeks to ensure 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 to prior consent.” See Pitts.
After passing through the Senate with a 26-10 vote, Senate Bill 7 now heads to the House to be heard in committee. See Pitts. We will be watching this bill closely and provide an update on further developments.