Employment Arbitration: A Closer Look
Martha Halvordson1
This article examines the problems with the current system used to resolve workplace disputes, the legal developments that have made pre-dispute mandatory arbitration a viable option, the features and benefits of arbitration for both employers and employees, and concludes that the use of pre-dispute mandatory arbitration for workplace disputes, when implemented with certain procedural safeguards, is an effective and fair way to resolve such disputes.
I. Introduction
The use of mandatory arbitration as a method to resolve workplace disputes2 “has risen rapidly since the early 1990s [when] Congress made jury trials and money damages available under Title VII (in 1991), [passed] the Americans with Disabilities Act in 1992, and the number of discrimination charges filed skyrocketed.”3 Today it is estimated “that 15% to 25% of employers nationally have adopted mandatory … arbitration procedures.”4 This means that “out of a non-union workforce of 121 million employees[,]”… “more than 30 million employees … are covered by such [arbitration] procedures.”5
The decision to arbitrate employment disputes is often “a unilateral decision made by [employers].”6 Few employers discuss with employees the problems both may face in litigation or work with employees to design an arbitration procedure both may prefer.7 Instead, employers frequently design arbitration procedures “with no employee input, often in secret, and then” spring the procedure on employees.8 Employees often are given no choice in using this unfamiliar procedure. Employees “must either ‘agree’ to waive their right to litigate and use the … arbitration procedure or lose their jobs.”0
In addition, many employers use mandatory arbitration procedures that are not fair to employees.10 For example, some employers use procedures that allow the employer to select the arbitrator or which restrict when and where the hearing may be held.11 It is no wonder that employment rights advocates take a cynical view toward mandatory arbitration of employee disputes.12
Opponents of pre-dispute mandatory arbitration provisions argue that if arbitration is as great as its proponents suggest, parties could choose arbitration after the dispute arises. The problem with this argument, however, is that an employer’s incentives regarding an unknown future dispute and a present dispute are quite different.13 When considering future disputes, the employer must consider a wide range of financial risks.14 On one extreme, the employer faces cases where the potential liability is small; on the other extreme are cases that could have a disastrous effect on the company.15 Faced with such risks, many employers are willing to arbitrate.16 It is in their interest to risk liability in a greater number of cases in order to reduce exposure to an award that could bankrupt the company.17
After the dispute arises, however, an employer’s risk analysis is significantly different.18 Now the employer knows the nature of the dispute and can evaluate the company’s chances of prevailing at trial. If the employer believes the employee has no realistic chance of prevailing, the employer has no incentive to arbitrate. It is now in the employer’s best interest not to arbitrate.19
“Employment rights advocates have fought” the use of pre-dispute mandatory arbitration provisions in employment agreements for decades.20 “Having twice failed to [convince] the Supreme Court” that requiring arbitration as a condition of employment is wrong, they have repeatedly turned to Congress “to introduce legislation that would abolish [pre-dispute mandatory] arbitration” provisions in employment agreements.21 As recently as last year, members of the U.S. House and Senate introduced the Arbitration Fairness Act of 2007, which would amend the Federal Arbitration Act to prohibit parties from enforcing pre-dispute mandatory arbitration provisions governing employment disputes unless part of a collective bargaining agreement.22
What if employment rights advocates succeed? What if Congress does change the law to prohibit pre-dispute mandatory arbitration and to permit only post-dispute arbitration for employment disputes? Will employees really be better off? Perhaps the use of pre-dispute mandatory arbitration to resolve workplace disputes deserves a closer look.
This article examines the problems with the current adjudication system, the legal developments that have made pre-dispute mandatory arbitration provisions a viable option, the features and benefits of arbitration for both employers and employees, and concludes that the use of pre-dispute mandatory arbitration for workplace disputes, when implemented with certain procedural safeguards, is an effective and fair way to resolve such disputes.
II. Problems With the Current Adjudication System
A. Agency System is Inefficient and Expensive
“[T]he current system for adjudicating workplace disputes is so … inefficient” and “expensive … that it is unfair to both employers and employees.”23 Before an employee may “file a discrimination lawsuit against an employer, an employee must first file a charge of discrimination with the [Equal Employment Opportunity Commission (EEOC)]24 or with the appropriate state or local agency.”25 The agency will investigate that employee’s allegations and attempt to settle the dispute.26
If the employer and employee cannot agree on a settlement, the agency determines [if] there is cause to find that discrimination occurred. If the agency finds “no cause,” it issues a “right to sue letter,” and the employee then can … file an action in federal or state court [against the employer.] If the agency finds cause it may issue the right-to sue-letter; set the case … before its own administrative adjudication process; or … file an action in federal court on the [employee’s] behalf.27
By establishing these procedures, Congress was attempting “to develop a system that would [curb] employment discrimination by providing … an agency that [would] investigate[] and resolve[] charges,” no matter the potential amount of damages, “without exposing employers to the high costs” of litigation.28 Instead, what has actually developed is a system where “employees’ claims are not investigated in a thorough or timely manner” and “employers accused of discrimination face outrageous costs.”29
“[A] reduced workforce and an increasing backlog of pending cases” challenge the EEOC in accomplishing “its mission of promoting [equal] opportunity in the workforce and enforcing Federal laws prohibiting … discrimination[.]”30 At the end of 2006, the “EEOC faced a [backlog] of nearly 40,000 private-sector charges[,] … a 19 percent increase over the previous year.”31 Recent “[e]stimates show [this backlog] may reach 67,000 by the end of” the EEOC’s 2008 fiscal year.32 As a result, and contrasting with the original intent of the EEOC, employees and employers experience significant delays and mounting litigation costs.
When a discrimination charge is filed, employers must complete a questionnaire and prepare a position statement for the investigation agency.33 “[I]f an employer does not have in-house counsel,” this alone could cost the employer thousands of dollars in attorney’s fees.34 The cost of defending a charge of discrimination gives the employer a strong motivation to settle regardless of the merits of the charge.35 It could easily cost an employer: between $5,000 and $10,000 to defend a charge; between $50,000 and $75,000 to take a case to summary judgment; and at least $125,000 to defend a case through trial.36 In light of this expense, employers are often willing to hand over $5,000 to $10,000 to avoid the cost and aggravation associated with defending an employee’s allegations, not to mention the possibility of an adverse judgment.37
B. EEOC’s Procedures Compromise Claims
In order to reduce its backlog of cases, the EEOC created new procedures in 1995 designed to encourage settlement at all steps of the agency process, establish priority charge-handling procedures, and limit full investigations.38 Instead of eliminating the agency’s inefficiencies, however, the new procedures perpetuated and exacerbated the agency’s problems.39 These procedures also “make it impossible for some employees to have their cases heard.”40
By “[e]ncouraging settlement at all stages of the” agency process, the EEOC has “further institutionalize[d] the practice of providing de facto severance to employees with baseless claims, while not making full payments to [those] employees with meritorious claims.”41 Instead of trying to find out whether the employer violated the law, the EEOC must now attempt to “make the case go away.”42 The agency has attained “efficiency at the expense of justice.”43
In addition, “[t]he priority charge-handling procedure [merely] formalize[d] the procedures investigators” had already been using.44 First-priority cases, or “A” cases, usually are “focuse[d] on class actions and new areas of law.”45 “Second-priority cases, [or] ‘B’ cases, [typically] are those involv[ing] an allegation by one or two employees, and … are not likely to generate new or important issues of law.”46 Finally, third-priority cases, or “C” cases, are deemed to be “frivolous or outside the agency’s jurisdiction.”47 The “A” and “B” cases are investigated and slated for mediation.48 The “C” “cases are usually administratively terminated.”49
C. Few Employees Get to Court
Before an employee can file a claim in federal or state court, he or she must have experienced counsel.50 The minimum damages required to sustain employment litigation is $75,000.51 This expense is often “out of reach for employees, unless they can retain an attorney … on a contingency [fee] basis.”52 Attorneys typically base their decision whether to take an employee’s case not on the merits, but on the potential for damages and the employer’s ability to pay.53 As a result, many worthy employment claims are never brought because the employee cannot afford to litigate and the potential for recovery is too small for an attorney to agree to accept a contingency fee agreement.
“Both employees with legitimate claims and [innocent] employers … are hurt in [the] process, while … employers who discriminate and employees [with] frivolous claims” are assisted by the push to settlement.54 Lawyers often “encourage … employers to settle frivolous claims by threatening them” with high costs to defend “and pressure employees with [good] cases to settle” by alerting them about potential delays, the likelihood “of a no-cause finding, and the financial and emotional cost of litigation.”55
“The failures of the current systems are [apparent.]”56 Arbitration, assuming it is lawful and solves the problems associated with the current system without creating new problems, may be a better alternative to forced settlements and litigation.57
III. Legal Developments
Congress enacted the Federal Arbitration Act in 1925 to “put arbitration agreements on the same legal footing as other contracts.”58 The Federal Arbitration Act “required the judicial enforcement of arbitration agreements in any” contracts involving commerce.59 After the act’s passage, “‘commercial’ arbitration became a frequently-used [method] to resolve business disputes.”60
The Federal Arbitration Act, however, “did not lead to … widespread use of arbitration for employment disputes.”61 This was because: “the risks and costs of employment litigation were generally viewed to be not [that] … great prior to 1991;” there was “uncertainty [about] whether arbitration agreements were enforceable [for] statutory … discrimination claims; and … even more fundamentally, [there was] uncertainty [about] whether the [act even] applied to most employment relationships.”62
In 1991, both the United States Supreme Court and Congress gave a huge boost to the use of employment arbitration.63 “First, in Gilmer v. Interstate/Johnson Lane,64 the Supreme Court” endorsed the use of “binding arbitration for employment claims, including statutory employment discrimination claims. Second, Congress passed the Civil Rights Act of 1991, which [gave plaintiffs] the right to jury trials in employment discrimination cases and” increased the potential damages available to them.65 In the Civil Rights Act, Congress also endorsed the use of alternative dispute resolution, including arbitration, to resolve employment disputes arising under the act and the federal law amended by the act.66
Even though 1991 was “a watershed year for employment arbitration, there still” was “some uncertainty as to whether the [Federal Arbitration Act] covered most employment relationships.”67 The reason for this uncertainty was a clause in the act “that excludes from its coverage ‘contracts of employment of seamen, railroad employees or any other class of workers engaged in foreign or interstate commerce.’”68 There remained a question as to whether this “clause excluded all employment contracts, or only those involving transportation workers.”69
“In 2001, ten years after Gilmer, the Supreme Court [answered this question] in Circuit City Stores, Inc. v. Adams.”70 In Circuit City, the Court held that the Federal Arbitration Act does apply “to contracts signed by most employees, and exclude[d] from its coverage only the employment contracts of seamen, railroad workers or other transportation workers.”71 The Court also continued to endorse the use of arbitration and “praised the ‘real benefits’ that arbitration provides,” including “the avoidance of litigation costs – a benefit … ‘of particular importance in employment litigation.’”72
One year after Circuit City, the Supreme Court considered another question related to employment arbitration.73 “In EEOC v. Waffle House, Inc.,… the Court considered whether the EEOC was barred from seeking victim-specific judicial relief, such as back pay, reinstatement, front pay and other damages for an employee who had signed a mandatory arbitration agreement.”74 The Court held that because the EEOC was not a party to the agreement to arbitrate and had interests separate from “those of the individual employee, the agency could bring an action seeking individual relief for that employee.”75 The practical effect of the decision is limited because the EEOC brings such relatively few actions each year.76
In light of the Supreme Court’s decisions in Gilmer, Circuit City, and Waffle House, courts now routinely uphold arbitration provisions, whether in employment agreements or in employment handbooks.77 “Recent challenges to [pre-dispute] mandatory arbitration agreements based on procedural fairness and equity arguments[, however,] have made it clear that” such agreements must be balanced.78 “The basic equity-based [challenges] to contract enforcement, such as unconscionablity, fairness and the duty to draft in good faith, still are present and likely will be the … focus of arbitration agreement challenges in the future.”79
IV. Features and Benefits of Arbitration
The following are some of the features and benefits of pre-dispute mandatory arbitration for both employers and employees:
A. No Juries
Employees usually prefer to have juries hear their cases. Employers, however, see “the avoidance of a potentially plaintiff-friendly, and overly-generous jury as [a] significant advantage of arbitration.”80 Juries are unpredictable “and the fear that a jury may award excessive … damages” is the reason many employers settle cases before trial.81 Arbitrations, on the other hand, “are usually heard by a single arbitrator or [a] three-arbitrator panel who have [significant] knowledge” of employment law.82 “While arbitration does not guarantee … moderate damage awards” or a well-reasoned decision, arbitrators typically are more predictable and reasonable in their awards than are juries.83 Arbitrators with an in-depth knowledge of the law are more likely to render fair and better reasoned decisions which benefit both the employer and employee. While the likelihood of an employee receiving a windfall verdict is reduced, the likelihood of a fair hearing and a reasoned award is increased.
B. Less Expensive
“A study … by the Institute for Civil Justice of the Rand Corporation concluded that arbitration resulted in a 20% cost savings to the parties.”84 In employment cases, “the cost savings may be [even] more [dramatic] than indicated by the Rand study.”85 “Arbitration often results in [at least] a 50% reduction in litigation costs.”86 A case that could easily involve “dozens of depositions, . . . weeks of preparation and two to three weeks of actual trial,” is condensed into a two- to three-day arbitration hearing preceded by limited discovery.87 The defense costs for a typical employment case can range from $75,000 to more than $200,000,88 while the average cost of arbitrating an employment dispute is $20,000.89 Arbitration makes the cost to defend an employment dispute, as well as the cost of bringing a case, a much less costly proposition.90
C. More Private Forum
Arbitration hearings are closed, unlike court proceedings where the hearings are public and the filings are matters of public record.91 This prevents the media from gaining access to the details of the disputes.92 This benefits the employer because it is spared negative publicity and benefits the employee because there is no public airing of his or her psychological, emotional or sexual history.93
D. Faster Resolution
“Court cases [typically] take several years to” wind “through the administrative agency process and then the [litigation] process.”94 Lengthy litigation can “cause stress [to] the parties and [to the] witnesses, distracts employees from more productive work, and adversely affects [company] morale.”95 Arbitration, on the other hand, is usually completed within a matter of months, not years.96 Of course, there can be protracted arbitration, for example, where the parties choose arbitrators with limited availability.97
E. Informal Procedures
Arbitration, while still an adversarial process, is “a whole less formal than [traditional] litigation.”
98 The procedure is fairly simple. Rules of evidence do not apply, there is limited discovery, and there are no transcripts of the proceeding unless the parties agree otherwise.
“[H]earings [typically] take place in conference rooms, not courtrooms.”99 Arbitrators are more likely “to accommodate the schedules … of the parties and [their] counsel, and generally try to make the arbitration [process] as pleasant as possible under the circumstances.”100 This “informality can aid in” preserving an “ongoing relationship between the employer and the employee.”101 In addition, in some situations “both the employer and employee may be able to present their case without … counsel.”102
F. Final and Binding
Traditional litigation does not often end with the trial.103 “A large jury verdict” against the employer will “often[] lead to a new trial.”104 Even when the employer wins at trial, the employee may appeal.105 Arbitration decisions, on the other hand, are usually final and binding, with very limited grounds for review.106 Judicial review is limited to defects in the procedure itself and not the merits of the case. There is value to both parties in knowing the dispute will be settled without long delays and increased costs.107
G. More Cases Decided on the Merits
Few employees actually get to jury trial in federal court.108 Most cases settle before trial,109 with “[o]nly 3.8% of federal court cases” ending in a jury trial.110 This may be “because the cost of proceeding to trial [is greater than] the cost of settlement,” or because discovery has revealed “the strengths and weaknesses of each side’s case so the parties” can better evaluate settlement.111 Still other cases are dismissed on summary judgment after most, if not all, of the discovery is complete.112 As a result, the use of pre-dispute arbitration may actually allow more employment claims to be heard and decided on their merits.113
H. Quality of Decision
The parties are able to select arbitrators for specific cases who have expert knowledge of the subject matter. Because of that experience and expertise, arbitrators can often render an award based upon a more thoughtful and thorough analysis with less bias and emotion than a jury.114 “It is certainly more likely that a jury [will] have an emotional reaction to a case, resulting in a verdict inconsistent with the evidence.”115
I. Results
There are varying opinions regarding arbitration of employment disputes, and whether or not arbitration favors employers or employees. According to a recent study conducted by the National Workrights Institute, a nonprofit organization whose goal is to improve the legal protection of human rights in the workplace, there is not a “statistically significant” difference with regard to employee win rates in arbitration and in trial.116 With regard to damages, the study indicates that awards for employees in litigation and arbitration are generally comparable.117 That said, it is true that a small number of employees who go to court and win a jury verdict do better on average than employees who win in arbitration.118 However, far more employees win in arbitration than win in court, and overall, employees who win in arbitration collect more than those who go to court.119 In some cases, arbitration provides higher median awards for employees than court – $100,000 compared to $95,554.120
J. Reduced Psychological Strain
A disturbing aspect of litigation “is that it often forces the plaintiff to become … obsessed with the litigation of his or her claim. Similarly, the corresponding strain on members of management who may be defendants [or witnesses] in the litigation … cannot be underestimated.”
121
“[A]rbitration offers plaintiffs the chance to resolve the dispute and [move] on with their lives.”122 The organization, likewise, is able to move on.123
K. Greater Access to Justice
Arbitration allows employees with relatively small monetary claims to be heard.124 A recent survey indicates that plaintiffs’ lawyers often require at least “a 35% contingency fee, and minimum provable damages of $60,000 … before they will []take a claim.”125 The same survey finds “19 of every 20 employees who feel that they have an employment discrimination claim against an employer are unable to obtain the representation of an attorney to pursue that claim in court.”126 As a result, only larger employment cases are litigated.127
L. Legally Enforceable
Before becoming an enforceable judgment, a judge must approve the arbitration award.128 A winning party may seek to confirm the award into a civil judgment.129 A losing party may seek to challenge or vacate the award.130 The availability of such judicial procedures helps to ensure that arbitrations are fair and just.131
V. Procedural Safeguards
The Supreme Court, in endorsing arbitration, “has emphasized that, ‘[b]y agreeing to arbitrate a statutory claim, a party does not forgo the substantive rights afforded by the statute; it only submits to their resolution in an arbitral, rather than a judicial forum.’”132 Accordingly, employers, when adopting pre-dispute mandatory arbitration provisions, should consider including the procedural safeguards highlighted by the Supreme Court in Gilmer, such as:
Scope – “Describe which groups of employees will be covered, and what [types] of disputes will be subject to arbitration.”133 “[D]ecide whether the agreement will apply to all employees, or only [those hired] after the arbitration policy is in place.”134
Arbitrator Selection – Allow for the selection of a qualified and neutral arbitrator. Permit employees to participate in the selection of the arbitrator from a diverse panel of arbitrators. “The agreement should [specify] the source of lists for potential arbitrators, for example, … the American Arbitration Association (AAA), … the Federal Mediation and Conciliation Service [(FMCS)], [the] Judicial Arbitration and Mediation Service (JAMS) … or one of the many other reputable private arbitration … services.”135 “The agreement should also specify the time period” to select an arbitrator and the process for selecting one.136
Arbitrator Authority—Specify the arbitrator’s authority “and the limits of that authority” to ensure a fair process.137 Doing so allows the parties to control the procedure and solidifies party expectations.
Counsel – Allow employees to select an attorney of their choice to represent them in the arbitration proceedings. Consider a provision that, if the employee chooses to proceed without counsel, the company will proceed without counsel also.
Discovery – Allow some amount of pre-hearing discovery, including the taking of depositions. Arbitrators can be given discretion to permit or limit such discovery.
Decisions – Require arbitrators to issue written opinions that explain their decisions. Such decisions increase confidence in the process and give some direction to the parties with regard to future conduct.
Available Remedies – Permit employees to recover any remedies in arbitration that would have been available to them in court, including attorneys’ fees and punitive damages. The arbitration agreement should not change the employees’ substantive rights, just the forum to resolve the dispute.
Costs – Employers should consider paying the costs. Absent an agreement on this, parties are expected to share the costs of the arbitration, which include the arbitrator’s fees. Some courts have labeled this practice as unfair to employees, who could have accessed the court system for relatively little cost and without having to pay an arbitrator.
In addition, arbitration provisions “should be written clearly and address directly the fact that [arbitration] is mandatory and is to be used as an alternative to [going to] court.”138 Proper and timely presentation of the arbitration policy is also important from a legal perspective.139 An open, full and timely presentation of the policy will defeat claims that there was a lack of “knowing” waiver of a judicial forum.140 Therefore, an essential part of having a successful arbitration policy is its presentation to employees.141
V. Conclusion
The U. S. Supreme Court has cleared the path for employers to require employees to sign pre-dispute mandatory arbitration agreements.142 “A successful arbitral system for [employment] disputes is in the public interest.”143 “It relieves [court congestion] while providing a less expensive, faster,” more accessible, and “more informal … method of dispute resolution.”144 Even so, pre-dispute mandatory agreements to arbitrate are not without potential problems.145 It is clear that, despite arbitration’s appreciable benefits, “employees and employers must both be assured that they will have the same procedural rights and remedies afforded by traditional” litigation.146 These rights include similar “levels of access, statutory protection, judicial impartiality, and official oversight.”147
For pre-dispute mandatory arbitration to succeed as a method to solve workplace disputes, employers must step forward to ensure “a balanced and neutral forum.”148 “[M]uch of the criticism of [mandatory] arbitration may be allayed through the [use] of provisions [in] the agreement” ensuring a fair method for selecting a neutral arbitrator; requiring “that employer claims (not just employee claims) be arbitrated; a setting of procedural standards;” establishing an equitable fee structure; and providing written awards.149
Given the benefits of arbitration, “and the ability to remedy many of its failings,” pre-dispute mandatory arbitration agreements that furnish “both parties all of the substantive rights afforded under the law” are definitely worth a closer look and should be promoted, not abolished.150
Footnotes
1 Martha Halvordson is co-founder and managing partner of Civil Alternatives, Inc., a full service alternative dispute resolution firm based in Kansas City. She received her J.D. from the University of Tulsa and her Master of Laws (LLM) in dispute resolution from the University of Missouri. She is a member of The Missouri Bar and the Kansas City Metropolitan Bar Association’s Alternative Dispute Resolution Committees.
2 In this article, “workplace disputes” refers to disputes between an employer and an employee, not between a labor organization and an employee.
3 Data Points: Prevalence of Mandatory Arbitration Systems Imposed on Employees, NELA, October 2007 at 1.
4 Id.
5 Id.
6 Lewis L. Maltby, Out of the Frying Pan, Into the Fire: The Feasibility of Post-Dispute Employment Arbitration Agreement, 30 Wm. Mitchell. L. Rev. 313, 315 (2003).
7 Lewis L. Maltby, Employment Arbitration: Is It Really Second Class Justice? Dispute Resolution Magazine, Fall 1999, available at http://www.adrforum.com/main.aspx?itemID=564&hideBar=False&navID=228&news=3
8 Id.
9 Id.
10 Id.
11 Id.
12 Id.
13 Maltby, note 6, at 317.
14 Id.
15 Id.
16 Id.
17 Id.
18 Id. at 318.
19 Id.
20 Id. at 315.
21 Id. at 315- 316.
22 Arbitration Fairness Act of 2007, H.R. 3010, S. 1782, 110th Cong. (2007).
23 David Sherwyn, Mandatory Arbitration: Why Alternative Dispute Resolution May Be the Most Equitable Way to Resolve Discrimination Claims, 6 CHR Reports 4, 7 (July 2006), available at http://www.hotelschool.cornell.edu/research/chr/pubs/reports/.
24 The Equal Employment Opportunity Commission is the federal agency responsible for enforcement of Title VII of the Civil Rights Act of 1964, as amended, the Equal Pay Act of 1963, and the Age Discrimination in Employment Act of 1967 (ADEA). These statutes prohibit employment discrimination based on race, sex, color, religion, national origin, age or disability.
25 Sherwyn, note 22, at 7.
26 Id.
27 Id.
28 Id. at 7-8.
29 Id. at 8.
30 Office of Inspector General Semiannual Report to Congress April 1, 2007 – September 30, 2007, Agents Igniting Change and Fostering Accountability, Effectiveness, and Efficiency in Government available at http://www.eeoc.gov/abouteeoc/plan/oig/oig-4-2007.html (last visited June 24, 2008).
31 Id.
32 Id.
33 Sherwyn, note 22, at 8.
34 Id.
35 Id.
36 Telephone interview with Katherine R. Sinatra, chair of the Kansas City Metropolitan Bar Association’s Labor and Employment Law Committee (May 5, 2008).
37 Sherwyn, note 22, at 8.
38 Id.
39 Id.
40 Id.
41 Id.
42 Id. at 9.
43 Id.
44 Id.
45 Id.
46 Id.
47 Id.
48 Id.
49 Id.
50 Id.
51 William M. Howard, Arbitrating Claims of Employment Discrimination, 50 Dispute Resolution J. 40 (Oct.-Dec. 1995).
52 Sherwyn, note 22, at 9.
53 Id.
54 Id.
55 Id.
56 Id.
57 Id.
58 Robert M. Shea, Should Employers Require That Workplace Disputes Be Arbitrated?, http://www.mbbp.com/resources/employment/arbitration.html.
59 Id.
60 Id.
61 Id.
62 Id.
63 Id.
64 Gilmer v. Interstate/Johnson Lane Corp. 500 U.S. 20 (1991). In Gilmer, the plaintiff, a securities dealer, had sought to bring his age discrimination claims directly in federal court despite a signed arbitration agreement contained in a securities industry registration form. The Court, relying on the Federal Arbitration Act and rejecting arguments that mandatory arbitration is inconsistent with civil rights statutes, affirmed an order compelling arbitration. Because Gilmer dealt only with the ADEA, and did not involve an employment contract, the question of mandatory arbitration of statutory claims continued to generate substantial litigation.
65 Shea, note 59.
66 Id.
67 Id.
68 Id.
69 Id.
70 Shea at note 59. Circuit City Stores v. Adams, 532 U.S. 105 (2001). In Circuit City, the plaintiff signed an employment application that contained a clause where he agreed to arbitrate “any and all…claims, disputes or controversies” related to his employment. Id. at 110. He later sued in state court alleging harassment because of his sexual orientation. Circuit City filed suit in federal court to stop the lawsuit and to compel arbitration. The Court held that the Federal Arbitration Act compels judicial enforcement of arbitration agreements in employment contracts. The Court acknowledged that its decision effectively pre-empted state laws that limit the use of arbitration agreements in the employment context.
71 Id.
72 Id.
73 Id.
74 Shea, note 59. EEOC v. Waffle House, Inc., 34 U.S. 279 (2002).
75 Id.
76 Id.
77 See Rojas v. TK Commc’ns, Inc., 87 F.3d 745 (5th Cir. 1996) (arbitration agreement should be enforced); Patterson v. Tenet Healthcare, Inc., 113 F.3d 832 (8th Cir. 1997) (enforcing arbitration provision in employee handbook); Desiderio v. Nat’l Ass’n of Securities Dealers, Inc. 191 F.3d 198 (2nd Cir. 1999) (enforcing U-4 arbitration provision); Haskins v. Prudential Ins. Co. of America, 230 F.3d 231 (6th Cir. 2000) (enforcing arbitration age and sex discrimination claim); Hardin v. First Cash Fin. Servs., 465 F.3d 470 (10th Cir. 2006) (where employee failed to sign, continued employment constituted consent to arbitration).
78 Philip J. Siegel, To Arbitrate or Not to Arbitrate, Professional Roofing (2004), available at http://www.professionalroofing.net/past/dec01/legal.asp, (last visited June 24, 2008).
79 Id.
80 Shea, note 59.
81 Id.
82 Id.
83 Id.
84 Garry G. Mathiason, Achieving Workplace Justice Through Binding Arbitration, SHRM Legal Report (Spring 1994) available at http://www.shrm.org/hrresources/lrpt_published/CMS_000940.asp, (last visited April 13, 2008).
85 Id.
86 Id.
87 Id.
88 Shea, note 59.
89 Id.
90 Id.
91 Id.
92 Id.
93 Dianne LaRocca, The Bench Trial: A More Beneficial Alternative to Arbitration of Title VII Claims, 80 Chi. -Kent L. Rev. 933, 937 (2005).
94 Shea, note 59.
95 Id.
96 Id.
97 Id.
98 Id.
99 Id.
100 Id.
101 Id.
102 Id.
103 Mathiason, note 83.
104 Id.
105 Id.
106 Shea, note 59.
107 Mathiason, note 83.
108 Arbitration Rewards Better Than Lawsuits, 23 Insurance Times (April 29, 2003), available at http://www.insurancejournal.com/pdf/InsuranceTimes_20030429_39125.pdf (last viewed June 25, 2008).
109 Shea, note 59.
110 Insurance Times, note 107.
111 Shea, note 59.
112 Id.
113 Id.
114 Mathiason, note 83.
115 Id.
116 Employment Arbitration: What Does the Data Show? The National Workrights Institute, available at http://www.workrights.org/current/cd_arbitration.html (last viewed June 25, 2008).
117 Id.
118 Id.
119 Id.
120 Id.
121 Mathiason at 22.
122 Id.
123 Id.
124 LaRocca at 937.
125 Id. at 937-38.
126 Id. at 937.
127 Id.
128 National Arbitration Forum, The Benefits of Arbitration, available at http://www.adrforum.com/main.aspx?itemID=1293 (last viewed on June 25, 2008).
129 Id.
130 Id.
131 Id.
132 Shea, note 59.
133 Mathiason, note 83.
134 Id.
135 Id.
136 Id.
137 Id.
138 Shea, note 59.
139 Id.
140 Id.
141 Id.
142 Andrew Colsky, Before Banking on Mandatory Arbitration, Consider the Interest, available at http://www.shrm.org/hrresources/lrpt_published/CMS_000942.asp (last visited April 13, 2008).
143 Aaron Ginandes, Laying Off Litigation: Arbitration Clauses in Employment Agreements, page 7, available at http://pegasus.rutgers.edu/~rcrlj/articlespdf/ginandes.pdf (last visited April 13, 2008).
144 Id. at 9.
145 Id.
146 Id. at 1.
147 Id.
148 Id.at 9.
149 Id.
150 Id.