EMPLOYMENT LAW BULLETIN

Vol. 03, No. 4

Courtesy of Eskridge Law, Attorneys at Law

Employers are increasingly requiring their employees to enter into binding arbitration agreements to resolve all disputes that may arise out of the employment relationship. Courts generally enforce arbitration agreements in the employment context, including claims of discrimination or harassment under Title VII of the Civil Rights Act of 1964 and the California Fair Employment and Housing Act (FEHA).

It is generally believed that arbitration agreements are more advantageous for the employer than for the employee. Indeed, it is almost always the employee who challenges the legality of arbitration agreements in court. However, Eskridge Law has found that arbitration is not necessarily the better policy for all employers because, contrary to what many employers may expect, arbitration is both lengthy and expensive. The arbitration process is not always more efficient in terms of time, because courts have speeded up the litigation process. Costs of arbitration are rising as the demand for arbitration rises. Employers are now required by law to pay all arbitration fees and expenses, and this may encourage employees to vindicate claims through arbitration they otherwise would not file in court.

Employers who nevertheless prefer to avoid the uncertainties of a jury trial should have an attorney review their arbitration contracts to ascertain the legality of all of the clauses, because requirements for employment arbitration agreements are particularly stringent in California.

Above all, the arbitration agreement must be mutual - that is, both the employee and the employer must agree to arbitration of all claims. If an employee challenges the validity of a mutual arbitration agreement, the court will likely enforce the agreement, but will most certainly sever any unlawful clauses. Five minimum provisions are required to arbitration of most employment disputes:

1. Neutral arbitrator: This requirement can be met by providing that an alternative dispute resolution center, such as Action Dispute Resolution Services or Judicial Arbitration and Mediation Service, will provide both the employer and the employee a list of potential arbitrators. If the parties cannot agree to the nomination of one of the potential arbitrators within 30 days, the center shall randomly select the arbitrator.
2. Discovery: It is sufficient to state that discovery shall be in conformity with section 1283.05 of the California Arbitration Act and all of the Act's other mandatory and permissive rights to discovery.
3. Written award: The arbitration agreement must provide for a written arbitration decision that sets forth the essential findings and conclusions on which the award is based.
4. Relief: The arbitration agreement must provide for all types of relief otherwise available in court.
5. Arbitration fees: An employee, who must agree to arbitration as a condition of employment, may not be required to pay any arbitrator's fees or expenses as a condition of access to arbitration.

Eskridge Law, Attorneys at Law, may be contacted by phone (310/792-7021), by fax (310/792-7022) or by e-mail (geskridge@ealaw.net). Please visit our web site at www.ealaw.net or www.employmentattorneys.net.

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