Exploring Mandatory Arbitration
When signing an employment agreement that includes mandatory arbitration, you forfeit the right to sue your employer in court. As a result, any legal claims that arise in the future are decided in a private forum by an arbitrator instead of a judge. It is an increasingly ubiquitous clause for contracts and terms of agreement. There are three main benefits to mandatory arbitration: time, cost, and flexibility. However, while arbitration may be a simpler and faster method, opponents to the system argue that it is also biased and unfair to the employee.
Arbitrations are generally resolved in a shorter time span than litigation and are more flexible. The trial date for a lawsuit is generally set at least one year after the case is filed as the judges have crowded court dockets. Even after that, it can take several years for the entire process to be over, as the losing party can choose to make an appeal. For arbitration, however, the entire affair can be resolved in only 45 days, depending on the amount of controversy and the type of arbitration. [1] According to a study by the Federal Mediation and Conciliation Services, the average time from filing the decision was about 475 days in an arbitrated case, while a similar case took from 18 months to three years to wend its way through the courts. [2] Arbitration hearings can usually be scheduled around the needs and availability of those involved, including weekends and evenings. Furthermore, resolving a case through arbitration is usually far less costly than proceeding through litigation because the process is quicker and less complicated than a court proceeding. [3] A shorter turnaround time means fewer attorneys’ fees incurred and less stress for the parties involved. It is also less intricate because the arbitrator can set practical rules to make the process easier for everyone. For example, the mediator can impose page limits, reduce the number of written submissions, switch to electronic document production, and conduct some hearings virtually. [4] A court case is much more formal and requires many steps per protocol that can be skipped with arbitration. Mandatory arbitration procedures are tailored to disputes to improve efficiency, reduce costs, and save time. While you are giving up the right to sue in court, arbitration is a more beneficial process for all parties involved.
On the flip side of the argument, the process of mandatory arbitration is said to be inequitable and biased as it nullifies legal protection. The employer is reponsible for hiring and paying the arbitrator has finanial incentives to vote in favor of the company. In the past, employers adopting mandatory employment arbitration have been successful in coming up with a mechanism that effectively reduces their chance of being subject to any liability for employment law violations to very low levels. Even in cases where the employee is successful and wins in arbitration, whether they can recover the full extent of damages available under the law can be limited by the arbitration agreement. Since arbitration is private, everything that happens behind those closed doors is supposed to remain secret, meaning there is no public review of the process and no appeal in the case of binding arbitration. Therefore, mandatory arbitration is a discriminatory method in which an arbitrator is judging between two parties, one of which has the power to employ the arbitrator for future cases.
Ultimately, mandatory arbitration is a biased, manipulative, and inadequate replacement of the judicial system. Arbitration should be a system in which both parties have equal say, yet, the reality is that the system is unjustly favorable to the employer. Arbitration has its perks of being flexible, quick, and cheaper than a jury trial, however, none of that matters if the outcome is illegitimately influenced by the employer.
