Tuesday, August 7, 2007

Arbitration Fairness Act would ban mandatory ADR of employment disputes

Mandatory arbitration agreements have long been favored as a tool by employers to limit the risks associated with jury trials. If the Democrats have their way, however, that tool may soon no longer be available. The Arbitration Fairness Act is currently pending in both the House and the Senate. These bills would amend the Federal Arbitration Act to render invalid and unenforceable pre-dispute arbitration agreements that require arbitration of employment disputes. Such disputes could only be arbitrated if the employer and employee agree to submit to arbitration after the dispute arises. The law's purpose is to prevent those with less bargaining power, such as employees, from being forced to arbitrate and give up their right to a jury trial. If this bill becomes law (which is doubtful as long as there is a Republican in the White House), arbitrations of employment disputes will all but disappear. It is hard to imagine a situation where a plaintiff would agree to give up a jury trial to have a dispute decided by a panel of arbitrators. If you currently use or would like to use arbitration as a means to resolve claims by your employees, you should write your Congressperson and Senator and urge opposition of these bills.