Arbitration for Workplace Issues

From spilled coffee to suits blaming snack food makers for the 'fattening' of America, litigation risk is becoming a daily fact of life as more and more people view the justice system as their own personal lottery — pick the right jury and anything is possible. This same sense of entitlement seems to have spread into the employment arena as well.

Trying to minimize this increasing risk potential and its devasting effect on running a business, smart businesspeople have joined the growing trend to include arbitration clauses in employment contracts, making use of a 1991 United States Supreme Court decision recognizing that the parties to an employment agreement may make a broad range of employment disputes subject to arbitration. Gilmer v. Interstate/Johnson Lane Corp. 500 U.S. 20 (1991).Arbitration benefits employers by minimizing the impact of these lawsuits on their day-to-day business, particularly those small businesses who lack the resources to take a dispute to trial. Arbitration is good for employees as well, since reports are that plaintiff's lawyers will not take cases where the employee has less than $75,000 in provable damages. In addition, all studies we have seen show that employees fare at least as well in arbitration as they do in litigation, while costing much less and in a lot shorter time than it normally takes to drag through the courts.