Originally from:

AAA Handbook on Employment Arbitration and ADR - Third Edition

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I. Introduction

More and more employers are considering whether arbitration of employment claims might offer a faster, less expensive, less public, and more predictable resolution than the jury system. This increasing interest in arbitration is leading to more cases on this subject. This chapter will review recent developments and offer guidance to employers, in the form of eighteen tips.

Tip One
 

Courts are not hostile to the idea of enforcing properly drafted arbitration agreements against employment claims. The United States Court of Appeals for the District of Columbia Circuit held that an agreement to arbitration was enforceable against an employee’s statutory claims for race discrimination, harassment, retaliation and outrageous conduct. The Cole decision is significant for three reasons. First, by ordering arbitration of claims arising under Title VII of the Civil Rights Act of 1964, the court continued the expansion by federal courts across the country of the ruling by the U.S. Supreme Court in Gilmer v. Interstate/Johnson Lane Corp.,2 that claims for age discrimination arising under the Age Discrimination in Employment Act of 1967 (ADEA) were subject to arbitration pursuant to the arbitration provisions set forth in forms used in the securities industry. In doing so, the court held that the Federal Arbitration Act’s exclusion for employment contracts will not apply to most employment arbitration provisions for non-union-represented employees. Second, the Cole decision concluded that it was permissible to require arbitration as a condition of employment. Third, to protect employees, the court held that employers must pay the arbitrator’s expenses.