Arbitration: The Employer's Magic Bullet

When I attend holiday cocktail parties, people often ask me employment law questions.  They ask other questions as well, like why would someone invite a lawyer to a cocktail party — such dull company.  I can’t answer that one but here is a more topical question — what is the one best thing an employer can do to protect itself from disastrous employment litigation?  My answer is to start an arbitration program for your workplace. 

I won’t bore you with a lengthy recitation of the law of arbitration in the non-union workplace over the past couple of decades.  Suffice it to say that it is entirely possible to craft a fully enforceable arbitration agreement that requires employees to submit every dispute they could otherwise file in court to arbitration.   This is a tremendous coup for the employer because it eliminates the possibility of a jury trial.  Instead of a jury that would feel sorry for the employee and assume that the employer has millions of dollars to give away, the case must be tried to an arbitrator who has experience in employment law.  This means that the employee will actually have to prove not only the asserted claims but his or her damages as well. 

Of course, this is no guarantee of victory for the employer but it certainly reduces the possibility of a runaway jury awarding an employee an exorbitant amount of damages.  Also, in general, arbitration is somewhat less expensive and less protracted than litigation in court.  As an extra bonus, plaintiffs’ attorneys often lose interest in a case when the possibility of a jury trial is removed. 

A great deal of my practice is devoted to arbitration of employment law claims.  Frankly, I am amazed that more employers do not use arbitration, considering the advantages it offers.