Chapter 32 - § 32.8 • POLICY CONSIDERATIONS

• Jurisdiction: Colorado

§ 32.8 • POLICY CONSIDERATIONS

The U.S. Supreme Court in Southland Corp. v. Keating stated that the FAA "declared a national policy favoring arbitration." 465 U.S. 1, 10 (1984). "[B]y agreeing to arbitrate, a party 'trades the procedures and opportunity for review of the courtroom for the [perceived] simplicity, informality, and expedition of arbitration.'" Gilmer, 500 U.S. at 31 (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth Inc., 473 U.S. 614, 628 (1985)). Similarly, the Colorado Supreme Court in Twin Lakes Reservoir & Canal Co. v. Platt Rogers, Inc. has recognized arbitration as a "quick and easy mode of obtaining justice." 147 P.2d at 834.

It is unlikely that either the federal courts or the Colorado courts will retreat from the position of favoring the enforceability of arbitration agreements. Nevertheless, in cases where the arbitrability of an employment dispute is less than clear, there are several policy arguments against arbitration that counsel should consider.

Courts, governmental agencies, and commentators have expressed concerns about whether individual common-law and statutory claims may be fully vindicated in an arbitral forum. The inequality of bargaining power between employers and nonunion employees has raised the concern that employers may structure arbitration in a way that disadvantages employees.⁵⁴ High arbitrator's fees and limitations on discovery have been cited as potential problems for employees in arbitration. Cole, 105 F.3d at 1477; Stuart H. Bompey et al., "The Attack on Arbitration and Mediation of Employment Disputes," 13 Lab. Law. 21, 36 (1997) (referencing absence of discovery and arbitrators' fees as potential disadvantage of arbitration). Scholars have warned that an employer's status as a "repeat player" in arbitration may create institutional biases against employees. Cole, 105 F.2d at 1476 ("As a result, the employer gains some advantage in having superior knowledge with respect to selection of an arbitrator."). See also Lewis Maltby, "Paradise Lost—How the Gilmer Court Lost the Opportunity for Alternative Dispute Resolution to Improve Civil Rights," 12 N.Y.L. Sch. J. Hum. Rts. 1, 4-5 (1994). Another concern is that arbitrators may be incompetent⁵⁵ or unrepresentative. U.S. GAO, Employment Discrimination: How Registered Representatives Fare in Discrimination Disputes, GAO/HEHS-94-17 at 2 (finding that 89 percent of the New York Stock Exchange arbitrators in New York were white males with an average age...