Employees of Bank of America Corp. (BofA) will now be required to utilize private arbitration for resolving most legal disputes with the company, according to a report by Bloomberg News and Financial Advisor.
The policy change by the nation’s second largest bank is similar to that instituted by other financial corporations who seek to resolve workplace conflicts through private settlements, non-disclosure agreements and contracts forcing workers to take their case to arbitration instead of the court system. They have found arbitration to be less costly, more efficient and more confidential than litigation.
A person asking not to be identified disclosed in the report that BofA’s policy revision will take effect within a month, with employees informed of it last week.
“This policy aligns us with our peers in the financial services industry,” a representative for the bank said. The representative added that employees who are registered with the Financial Industry Regulatory Authority are already currently required to arbitrate certain disputes.
Under the new rule, BofA employees can still go to the courts with sexual harassment and assault claims. Mandatory arbitration is banned for such claims as well as retaliation claims by whistleblowers. Some protections that are generally available in court, such as the right to appeal, may not be available in arbitration.
Handling financial services disputes requires counsel with a significant understanding of the industry, the laws, rules and regulations that impact our clients and the forums in which disputes are adjudicated. At Lewitas Hyman, our attorneys’ unparalleled litigation experience comes from leveraging their industry-specific knowledge developed from working at firms such as Morgan Stanley, UBS Financial Services and EVEREN Securities, serving as outside counsel for some of the world’s largest law firms, and through prior affiliations with the SEC. For more information about our arbitration and litigation services, please contact us at (888) 655 6002 or through our online contact form.
