Ethical Issues in Employment Arbitration

• Author: Kendra Robbins
• Position: J.D., Georgetown University Law Center (expected May 2022); B.S., Oklahoma State University (2019)
• Pages: 1261-1283

Ethical Issues in Employment Arbitration

KENDRA ROBBINS*

INTRODUCTION

Arbitration has gained widespread support and legitimacy over the years as a

forum for dispute resolution, providing an alternative forum to parties who want

to avoid the formal litigation process.

1

Touted as a cheaper, faster, informal alter-

native to litigation, what once was a practice reserved for a narrowly defined cate-

gory of contractual disputes has become a frequently used dispute mechanism in

many different industries.

2

And the characteristics that once attracted parties to

submitting their claims to formal litigation have now started to disappear because

of the growing similarities to the formal judicial process found in arbitration.

3

Arbitrators are now able to provide relief to injured parties in a vast array of con-

tractual disputes, including commercial disputes, employee-employer grievances,

and international disputes.

4

Virtually everyone today is subjected to at least one

mandatory arbitration agreement—in cell phone contracts, in Uber user agree-

ments, in credit card contracts—to the point that the modern arbitration process

has practically become an extension of litigation.

5

Parties to a contract or collec-

tive bargaining agreement electing to subject disputes to arbitration are not the

only parties who benefit: the courts also benefit from arbitration.

6

Alternate dis-

pute resolution mechanisms prevent an already overloaded judiciary from being

bogged down with contract disputes that can be solved outside a courtroom

through an arbitrator.

7

But at what cost does this cheaper, less formal dispute re-

solution mechanism come to parties compelled to arbitrate their disputes, rather

than submit their claims to the formal litigation process?

While arbitration has its benefits, it is not the perfect route to achieve fair

administration of justice. With an ever-growing, ever-changing legal system

* J.D., Georgetown University Law Center (expected May 2022); B.S., Oklahoma State University (2019).

© 2021, Kendra L. Robbins.

1. See Thomas J. Stipanowich, Arbitration: The “New Litigation”, 2010 U. ILL. L. REV. 1, 4 (2010).

2. See id.

3. Id. at 8 (“By the beginning of the twenty-first century . . . it was common to speak of U.S. business arbi-

tration in terms similar to civil litigation—‘judicialized,’ formal, costly, time-consuming, and subject to hard-

ball advocacy”).

4. See id. at 4-5.

5. See Jay Folberg, Arbitration Ethics, 9 DISP. RESOL. MAG. 5, 5 (2002).

6. See Stipanowich, supra note 1, at 4. Here, Stipanowich posits that part of the reason courts have seen a

decrease in litigation could be because of the appealing aspects of binding arbitration.

7. Michael H. LeRoy, Jury Revival or Jury Reviled - When Employees are Compelled to Waive Jury Trials,

7 U. PA. J. LAB. & EMP. L. 767, 768 (2005).

1261

constantly facing new legal issues, arbitration also deals with significant proce-

dural and substantial changes.

8

These changes affect how individuals access the

legal system to resolve their issues.

9

To ensure fair access to equitable relief for

all parties subjected to arbitration and to ensure no party is deprived of their con-

stitutional right of due process, legitimacy of arbitration must be protected by

ensuring that arbitrators, who have the responsibility of deciding the fate of the

disputes before them, remain impartial and unbiased when making their

decisions.

10

This Note explores the background of arbitration and its growth in popularity

in the American judicial system. It then discusses policy issues that often nega-

tively impact arbitration and prevent fair and equitable administration of justice.

It then discusses the need to resolve these policy issues in a way that achieves

fairness and impartiality in the arbitration system and public trust in the arbitra-

tion system, while also maintaining the independence required to prevent

unnecessary judicial review. Finally, it discusses a potential resolution—

expanded self-governance by the arbitration associations in the form of a more

extensive sanctions process in instances of bias or misconduct—as a way to

address these policy issues.

I. BACKGROUND OF ARBITRATION

Arbitration existed as an alternative dispute resolution mechanism long before

Congress enacted legislation governing the arbitration process. In fact, arbitration

was a “well known and actively practiced” dispute resolution system in

America’s early years

11

and accepted as an alternative to formal litigation by

many of the nation’s founding fathers.

12

However, arbitration did not receive no-

table, widespread approval in the U.S. until Congress enacted the Federal

Arbitration Act (“FAA”) in 1925 to enforce arbitration agreements related to

commerce and maritime transactions.

13

The FAA was enacted to clarify any mis-

understanding that the judiciary had a negative attitude towards arbitration

clauses.

14

This misunderstanding is exemplified by cases such as Tobey v. County

of Bristol, in which Judge Story delivered a critical opinion about a case in which

a contractor, Tobey, tried to compel arbitration against the County of Bristol after

8. Stipanowich, supra note 1, at 8-9.

9. Id. at 8.

10. See Ahmed Mohammad Al-Hawamdeh, Noor Akief Dabbas & Qais Enaizan Al-Sharariri, The Effects of

Arbitrator’s Lack of Impartiality and Independence on the Arbitration Proceedings and the Task of Arbitrators

under the UNCITRAL Model Law, 11 J. POL. & L. 64, 64 (2018).

11. James Oldham, Presidential Address: Historical Perspectives on the Judicial Enforcement of Arbitration

Agreements, in ARBITRATION 2014: THE TEST OF TIME: PROCEEDINGS OF THE SIXTY-SEVENTH ANNUAL

MEETING, NATIONAL ACADEMY OF ARBITRATORS, 2 (Richard N Block et. al. eds., 2014).

12. Id. at 7.

13. 9 U.S.C. §1 (1994).

14. Stephen J. Ware, Employment Arbitration and Voluntary Consent, 25 HOFSTRA L. REV. 83, 87-90

(1996).

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