ARBITRATION GETS A BOOST
The Good and Bad of Keeping
Disputes Out of Courtroom
March 22 - Arbitration, a long valued tool for companies in resolving disputes with employees,
has gained new importance following a high court ruling that
employers can force workers into arbitration rather than having to
go to court.
Business interests hailed Wednesday's 5-4 Supreme Court ruling,
which held that companies can enforce employee arbitration
agreements. Arbitration has increasingly been used to resolve a
variety of workplace disputes, including employment discrimination
claims. Employees are often required to waive their right to
litigate and use the company's arbitration system as a condition
Many Unfamiliar With
Arbitration advocates say employees can also benefit from the
agreements. "There are advantages and disadvantages for both
parties," said Mark Astarita, a New York securities attorney
who has represented employees and employers in arbitration cases.
"You wind up with a process that is as fair, with outcomes
that, on a statistical basis, are very similar to what you'd get
in a courtroom."
Added Astarita: "Some say [arbitration] favors the
employer but it's also big plus for the employee because it
eliminates one of the advantages that corporations usually have,
which is that the company can afford to go to court and worker
Fairness Built In?
"When you go to court, the other side doesn't get to
choose the judge. Frequently, the employer chooses the
arbitrator," he said, citing a case in which an executive
with the Hooters restaurant chain handpicked an allegedly
sympathetic arbitrator to settle a dispute with an employee.
Maltby also cited a recent U.S. Labor Department study that
found that the majority of employer arbitration plans did not meet
minimum due-process requirements. Among the common flaws are
provisions denying employees the right to submit evidence in
arbitration hearings and prohibitions against the award of
punitive damages to workers who win their cases.
Employees Unfamiliar With Arbitration
Up to 20 percent of employers in the United States have
arbitration plans. But company arbitration plans are varied, and
many employers never familiarize themselves with the plans behind
the agreements they sign.
"But thousands of arbitration cases go to this cottage
industry of arbitrators out there that no one knows anything
about," he added.