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Arbitration and Employment Law

Attorneys who have been involved in employment law litigation will almost unanimously agree that lawsuits involving employer/employee disputes are legally complicated, emotionally charged, slow-moving, and expensive.

Because of those problems, alternative methods of resolving conflicts in the workplace have recently gained increasing respect from both legislators and courts. One of the most important of these is arbitration.

There are a number of reasons why employers might favor arbitration:

  • reduced litigation costs,
  • limited ability to appeal,
  • faster results,
  • greater privacy,
  • less time is required to deal with them,
  • arbitrators are generally more predictable than juries,
  • arbitrators are generally less sympathetic than juries,
  • better predictability helps settlement possibilities,
  • and there’s a potential decrease in insurance premiums.

Arbitration also is growing in popularity as courts are increasingly favoring collective bargaining agreements (CBAs) and other work contracts that specify that disputes between an employer and an employee must be settled in arbitration settings instead of the courtroom. In addition to arbitration’s increasingly friendly reception by the courts, it also has newfound popularity with legislators.

Both the text of the Civil Rights Act of 1991 and the Americans with Disabilities Act (ADA) encouraged “the use of alternative means of dispute resolution, including . . . arbitration . . . to resolve disputes arising under the chapter.”

Of all federal discrimination legislation, the ADA is arguably the most amenable to arbitration. The Act itself allows that the provisions of a collective bargaining agreement be taken into account in the case-by-case analysis of the employer’s duty under the Act.

In addition, the Equal Employment Opportunity Commission’s interpretive guidelines recognize that an ADA accommodation may constitute undue hardship if it interferes with the CBA or with the rights of fellow employees – both factors that would benefit from an arbitrator’s expertise.

Mastering HR: Americans with Disabilities Act (ADA)

An employer with a compulsory arbitration policy, or one that wishes to start one to decrease its chances of facing an employment discrimination lawsuit, is more likely to have that agreement upheld if: (1) it is made with an individual rather than a bargaining unit; (2) it specifically provides that all claims, including discrimination claims, are to be arbitrated; and (3) the agreement is signed at a time when the employee is getting something from the employer (i.e., being hired, receiving a promotion, or getting a raise).