Can I require employees to sign arbitration agreements in Kentucky? What are the requirements?

Yes, employers in Kentucky can require employees to sign arbitration agreements under certain conditions.

Requirements for Arbitration Agreements in Kentucky

According to KYRS 336.700, an employer may require an employee or person seeking employment to execute an agreement for arbitration, mediation, or other form of alternative dispute resolution as a condition or precondition of employment. However, any arbitration agreement executed by an employer and an employee or a candidate for employment under this section shall be subject to general contract defenses as may be applicable in a particular controversy, including fraud, duress, and unconscionability.

Exceptions to Arbitration Agreements in Kentucky

KYRS 417.050 states that this chapter does not apply to:

• Arbitration agreements contained within the collective bargaining agreements entered into by employers and the respective representatives of member employees;
• Insurance contracts. Nothing in this subsection shall be deemed to invalidate or render unenforceable contractual arbitration provisions between two (2) or more insurers, including reinsurers; and
• Arbitration agreements entered by any industrial insured captive insurer that is created under the Product Liability Risk Retention Act of 1981, 15 U.S.C. secs. 3901 et seq., as amended.

Enforcement of Arbitration Agreements in Kentucky

KYRS 417.060 states that on application of a party showing an agreement described in KRS 417.050, and the opposing party’s refusal to arbitrate, the court shall order the parties to proceed with arbitration. If the opposing party denies the existence of the agreement to arbitrate, the court shall proceed summarily to the determination of the issue so raised. The court shall order arbitration if found for the moving party; otherwise, the application shall be denied.

Conclusion

Employers in Kentucky can require employees to sign arbitration agreements as a condition of employment, subject to general contract defenses. However, there are exceptions to this rule, and the enforcement of arbitration agreements is subject to court order.

Jurisdiction

Kentucky

• Labor