Nov. 2000–This is currently one of the most divisive issues in employment law. The controversy surrounds what are known as predispute arbitration clauses: agreements made long before any trouble arises that workers will use arbitration to resolve disputes with the company.
In most arbitrations, the case goes before an arbitrator or a panel of three. Usually their decision is binding and can’t be appealed. Unlike lawsuits, which can take years to thrash out in court, arbitration has at least the potential of resolving things in a matter of days or weeks. It also keeps cases away from juries, many of whom are working people and see things from the employee’s perspective.
While this conflict resolution technique may be appropriate in certain cases, there are inherent problems with predispute arbitration clauses. Some companies require workers to sign them as early as on the job application, or later when bonuses, stock options, or promotions are awarded.
The net effect is that workers lose the right to a jury trial-a right guaranteed by certain laws, including the federal Civil Rights Act and the Americans with Disabilities Act. On these and other grounds, predispute arbitration clauses have faced widespread court challenges in recent years.
By making arbitration mandatory, companies cause employees to become suspicious of the process and more likely to challenge it in court. There are better ways to keep disputes out of court than forcing workers to decide ahead of time how to resolve conflicts.
One option is mediation, in which you and the worker negotiate a mutually acceptable settlement rather than having one imposed on you by an arbitrator. Mediation can prevent further damage to work relationships if an employee is still at the company.
This confidential method also works well when there are sensitive issues that could prove embarrassing to both employee and company-as there are in sexual harassment cases. “Accommodation” cases under the Americans with Disabilities Act are also good candidates for mediation, since it can lead to creative solutions.
Another possibility is a multistep approach, such as informal discussion between the worker and management, followed by mediation with the help of a neutral third party. If these methods fail, voluntary resolution by an outside arbitrator could be the final option.