From litigation to mandatory arbitration: the shift in employment dispute resolution.

• Author: Waller, Jeff
• Position: Legal Speak

The use of arbitration to resolve employment disputes has become very popular because arbitration is typically less expensive than litigation, there is greater privacy (court documents are public records where arbitration records are not), results are obtained faster and often there is a greater predictability of the outcome of the arbitration. The reduction in cost as compared with litigation expense even holds true despite both parties can be, and often are, represented by an attorney in the arbitration heating.

Arbitration is an alternative to litigation where the parties agree in advance to submit their disputes to an unbiased third person who will take evidence, hear testimony and then issue a decision regarding the dispute. Typically, the arbitrator's decision is binding upon both parties just as if the matter had been decided in court. Arbitration awards are also enforceable in court, if needed.

ARBITRATION PROFESSIONALS

There are many professional arbitration companies available that can provide not only an arbitrator with an extensive background in employment law, but also can provide arbitration rules and procedures, staff that keep the arbitration process moving forward, and a hearing location. The rules and procedures can be particularly helpful in reducing cost because they set forth time requirements and procedures that begin on the date a party requests arbitration, and include how the parties exchange evidence, how arguments and evidence are presented at the hearing, and include a deadline for the arbitrator's final decision.

Employers have used two methods to require that an employee submit any employment dispute to arbitration: a mandatory arbitration provision included in the employee manual, or a separate signed arbitration agreement. Each of these areas has its apparent advantages and disadvantages, but the trend is for employers to use a separate signed agreement. As with any choice affecting the employment relationship, an employer should check with their lawyer for advice.

For a time, many employers preferred to include a mandatory arbitration provision within the employee manual because of the simplicity of merely providing a new hire with the employee manual and having the employee sign a document that he or she had reviewed the manual. Further, in most employee manuals the employer reserves the tight to change the manual without notice to the employee, which provided the employer with additional flexibility...