Originally from Dispute Resolution Journal

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A well-designed employment arbitration system for statutory disputes “can provide the same type and degree of justice to employers and employees as labor arbitration has traditionally provided to parties in contractual disputes,” says the author. The system, however, must contain four elements before a reviewing court will find it enforceable and exclusive. Here is a comprehensive look at the author’s four vital ingredients for a successful program as well as the employment issues—primarily involving matters of justice—that remain to be addressed by the courts.

This article addresses the coming third generation of cases dealing with individual employment arbitration. The first generation climaxed in the Supreme Court’s 1991 decision in Gilmer v. Interstate/Johnson Lane.1 Gilmer unequivocally established the general legitimacy and enforceability of pre-dispute agreements to arbitrate individual statutory claims. The second generation of cases, which continues today, largely completed the extension of Gilmer to other sorts of statutory claims, to other sorts of employers, and to other sources of arbitration
agreements. Until the Supreme Court speaks again, the landmark case of the second generation is likely to be Judge Harry Edwards’ 1997 opinion in Cole v. Burns International Security Services.2 Cole and other cases adopted a narrow interpretation of the Federal Arbitration Act’s exclusion of contracts of employment and declined to draw distinctions between the statute involved in Gilmer (the Age Discrimination in Employment Act—ADEA) and other individual rights statutes.3 Those cases also worked through most aspects of the “consent” issue, holding that employees who accept an arbitration agreement are bound by it.