New Options for Resolving Work Disputes
The landscape for resolving U.S. employment disputes seems to be changing quickly these days. A recent Supreme Court decision suggests that arbitration will play a larger role in the future, and a pending case may put limitations on the suits that can be brought by the Equal Employment Opportunity Commission (EEOC). In addition, actions by the EEOC and the U.S. Department of Labor (DOL) suggest the federal government is putting increased emphasis on mediation processes.
The big event, of course, is the recent Supreme Court ruling in Circuit City v. Adams. In this case, the Court backed a binding arbitration contract the employee had signed as part of the job application. The majority opinion in the 5-4 decision strongly endorses employers' efforts to enforce arbitration in workplace disputes.
The decision states, "Arbitration agreements allow parties to avoid the costs of litigation, a benefit that may be of particular importance in employment litigation, which often involves smaller sums of money than disputes concerning commercial contracts." Excluding all employment contracts from the jurisdiction of the arbitration act would "call into doubt the efficacy of alternative dispute resolution procedures adopted by many of the nation's employers." Parties who are required to abide by arbitration agreements do not give up their substantive rights granted by federal employment laws but rather submit them to a different resolution process than lawsuits offer, Justice William Kennedy wrote.
In its next term, the Court will turn its gaze to a case that raises the question of whether the EEOC should be barred from seeking damages for victims of discrimination who are bound by arbitration agreements. The decision has the potential to eliminate class-action suits by the EEOC if employees have signed an arbitration agreement. If that happens, the EEOC could be limited to addressing only broad issues, such as hiring and promotion policies, in such cases.
With Circuit City to support their preference, businesses will probably start including binding arbitration contracts as a condition of hiring, analysts predict. Companies like the contracts because they keep them out of court, according to Stephen Bokat, general counsel for the U.S. Chamber of Commerce. "Juries are very risky, particularly for large corporations," he says. "It's much faster and cheaper to get these things resolved in arbitration."
On the other hand, some employers might wind up frustrated by the lack of legal recourse to an arbitration decision. Gil Diekmann, a partner in the Seyfarth Shaw law firm, notes that arbitration "is good for employers if they win, but not so good if they lose and want to appeal." He adds, "The awards are very difficult to overturn."
Another important alternative dispute resolution (ADR) trend is the EEOC's recent focus on mediation. The agency points out that nearly half – $108.4 million – of the $245.7 million it collected in pre-litigation cases came through its voluntary mediation program. The number of charges resolved successfully through mediation was 7,438 in 2000, compared with 4,833 in 1999. Mediated resolutions were completed relatively quickly too, taking an average of 96 days.
Another sign of the times came in October 2000, when the Department of Labor awarded $1.1 million to the National Alliance for Education in Dispute Resolution, a consortium of 16 universities and professional organizations that train people in ADR. The grant is targeted at promoting mediation to resolve employment disputes arising from such laws as the Family and Medical Leave Act, wage and hour legislation, and various whistleblower statutes. The consortium will train outside mediators and DOL staff on the most effective mediation processes to use for particular statutes, in hopes of removing an ongoing stumbling block – the lack of trained external and internal mediators for both government-ordered and court-ordered mediation efforts.
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To read more about the Supreme Court's Circuit City decision, see
http://supct.law.cornell.edu/supct/html/99-1379.ZS.html
Audio commentary on Circuit City decision is at
http://www.npr.org/news/specials/supremecourt/
More on EEOC mediation efforts can be found at
http://www.eeoc.gov/accomplishments-00.html
A link to the American Arbitration Association, the largest dispute-resolution service, according to the Wall Street Journal, can be found at
http://www.adr.org
The big event, of course, is the recent Supreme Court ruling in Circuit City v. Adams. In this case, the Court backed a binding arbitration contract the employee had signed as part of the job application. The majority opinion in the 5-4 decision strongly endorses employers' efforts to enforce arbitration in workplace disputes.
The decision states, "Arbitration agreements allow parties to avoid the costs of litigation, a benefit that may be of particular importance in employment litigation, which often involves smaller sums of money than disputes concerning commercial contracts." Excluding all employment contracts from the jurisdiction of the arbitration act would "call into doubt the efficacy of alternative dispute resolution procedures adopted by many of the nation's employers." Parties who are required to abide by arbitration agreements do not give up their substantive rights granted by federal employment laws but rather submit them to a different resolution process than lawsuits offer, Justice William Kennedy wrote.
In its next term, the Court will turn its gaze to a case that raises the question of whether the EEOC should be barred from seeking damages for victims of discrimination who are bound by arbitration agreements. The decision has the potential to eliminate class-action suits by the EEOC if employees have signed an arbitration agreement. If that happens, the EEOC could be limited to addressing only broad issues, such as hiring and promotion policies, in such cases.
With Circuit City to support their preference, businesses will probably start including binding arbitration contracts as a condition of hiring, analysts predict. Companies like the contracts because they keep them out of court, according to Stephen Bokat, general counsel for the U.S. Chamber of Commerce. "Juries are very risky, particularly for large corporations," he says. "It's much faster and cheaper to get these things resolved in arbitration."
On the other hand, some employers might wind up frustrated by the lack of legal recourse to an arbitration decision. Gil Diekmann, a partner in the Seyfarth Shaw law firm, notes that arbitration "is good for employers if they win, but not so good if they lose and want to appeal." He adds, "The awards are very difficult to overturn."
Another important alternative dispute resolution (ADR) trend is the EEOC's recent focus on mediation. The agency points out that nearly half – $108.4 million – of the $245.7 million it collected in pre-litigation cases came through its voluntary mediation program. The number of charges resolved successfully through mediation was 7,438 in 2000, compared with 4,833 in 1999. Mediated resolutions were completed relatively quickly too, taking an average of 96 days.
Another sign of the times came in October 2000, when the Department of Labor awarded $1.1 million to the National Alliance for Education in Dispute Resolution, a consortium of 16 universities and professional organizations that train people in ADR. The grant is targeted at promoting mediation to resolve employment disputes arising from such laws as the Family and Medical Leave Act, wage and hour legislation, and various whistleblower statutes. The consortium will train outside mediators and DOL staff on the most effective mediation processes to use for particular statutes, in hopes of removing an ongoing stumbling block – the lack of trained external and internal mediators for both government-ordered and court-ordered mediation efforts.
====================================================
To read more about the Supreme Court's Circuit City decision, see
http://supct.law.cornell.edu/supct/html/99-1379.ZS.html
Audio commentary on Circuit City decision is at
http://www.npr.org/news/specials/supremecourt/
More on EEOC mediation efforts can be found at
http://www.eeoc.gov/accomplishments-00.html
A link to the American Arbitration Association, the largest dispute-resolution service, according to the Wall Street Journal, can be found at
http://www.adr.org