Employment Law - Arbitration

Front 1

Reasons for arbitration (6)

Back 1

1) No Jury: This is good for employers because juries usually side with employees.
2) Confidentiality: Generally arbitration is confidential, which both parties like. However this is more work for judges, so they don’t like it. Also, judges don’t like to put things under seal, so it is available less and less. Instead judges just tell the parties to redact the file and don’t put it under seal.
3) Cost: Both sides like that it is cheaper.
4) Speed: Both sides like that it is fast, about twice as fast
5) Right to appeal: Generally there is no right to appeal, but it depends on the contract.
6) Fairness: Generally arbitrators are even handed because if they are not then they will not be hired.

Front 2

Federal Arbitration Act (FAA)

Back 2

Says that courts have to affirm arbitration agreements if they are valid under the FAA.
- This means that suits that have an arbitration clause will be thrown out of court.

Front 3

Arbitration clause validity

Back 3

Generally arbitration agreements are found to be arbitral, unless unconscionable.
- compulsory is ok

Front 4

Arbitration clause Unconscionable (6)

Back 4

Can’t be unconscionable, must meet standards of fairness. Matter of state law. Can’t treat arbitration contracts different than other contracts for unconscionability.

1) Taking away rights: arbitration is just a shifting of forum so you can’t take away their rights by shifting the forum. You can make changes but can’t take away rights.
2) Discovery limitations must be reasonable
3) Filing costs can’t be unreasonably high
4) Holding that employee can’t recover back pay.
5) Ok to give up right to appeal
6) Arbitration can be decided as the forum for discrimination cases.

Front 5

EEOC and Arbitration agreements

Back 5

EEOC can still litigate even if employee signs arbitration agreement because the agreement is between the employee and the employer not the EEOC.

Front 6

Class Action Arbitration

Back 6

Employers don’t like because:
o No appeal
o Tendency to split the baby
o Creates a lifetime appointment for the arbitrator

-Does not occur unless the employer agrees to class action arbitrate. It is not enough that there is an arbitration clause, just because they agree to arbitration per employee does not mean that they agree to arbitrate in a class action setting.

Front 7

Class Action Arbitration Waiver

Back 7

Recently the NLRB made a ruling that these were not ok because they are a prohibition by an employer on an employees concerted activity.