Arbitration a fair tool in workplace
Employers face a terrible choice. Fearful of the costs and uncertainties of litigation, many employers have introduced mandatory arbitration clauses into their employment agreements. These clauses often require individual arbitration of claims and prohibit class actions. Unfortunately, the legality of these class-action waivers remains doubtful. The National Labor Relations Board maintains the waivers are illegal and that an employer who requires a waiver risks facing an unfair labor practices charge.
Following last week’s oral argument in Epic Systems v. Lewis, the U.S. Supreme Court will decide whether employers have the right to require individual resolution of claims brought by employees. The court should embrace arbitration as a fair and efficient means of resolving workplace disputes. In recent years, a series of Supreme Court decisions have endorsed class-action waivers in consumer contracts. The court should apply the same principles favoring arbitration apply to employment contracts.
The National Labor Relations Act protects an employee’s right to engage in “concerted activities.” The NLRB has interpreted this to mean employees have a right to pursue class-wide resolution of claims. An employer who requires employees to waive their right to a class action has, according to the NLRB, committed an unfair labor practice. The NLRB has invalidated dozens of arbitration agreements with class-action waivers since it first confronted the issue in 2012.
The Federal Arbitration Act requires courts to enforce arbitration agreements. The drafters intended the law to reverse judicial hostility to arbitration agreements. In the years since its enactment, arbitration agreements have become increasingly common. Without waiving any rights or protections, the parties to an arbitration can resolve their dispute in a fair and efficient manner.
Courts should enforce employment agreements containing individual arbitration agreements. Class-action litigation tends to be unfair, unrepresentative and unlikely to provide genuine relief to plaintiffs. While class-action
Drafters of the Federal Arbitration Act intended the law to reverse judicial hostility to arbitration agreements. In the years since its enactment, these agreements have become increasingly common. Without waiving rights or protections, parties to an arbitration can resolve their dispute in a fair and efficient manner.”
litigation may provide some sort of regulatory effect, it fails when it comes to the actual resolution of disputes.
The arbitration process contains advantages for employees as well as employers. An arbitration proceeding can produce a more efficient, expeditious, and inexpensive form of justice. Unlike in a classaction lawsuit, the arbitration plaintiff has the opportunity to testify. In class-action litigation, it’s likely that an employee will never have the chance to tell his or her side of the story to a neutral third party.
In an arbitration proceeding, the parties can ensure that a trained professional will hear the dispute. The arbitrator will likely have years of experience with the type of claim at issue. Moreover, arbitrators are freed from the dictates of precedent. Instead, arbitrators can create remedies that potentially benefit employer and employee.
The costs of an arbitration hearing are much less. Arbitration, unlike classaction litigation, is aimed at actual resolution of a dispute. It isn’t about lining the pockets of lawyers. Importing expensive class-action litigation procedures into employment disputes does not favor employees.
Critics of arbitration in employment should take note of its many advantages and, instead of seeking to constrain its use, seek to remedy its flaws. Efforts to fix the perceived faults of arbitration would prove much more constructive than a series of lawsuits to prevent its use.