Arbitration of Employment Claims: The Basics

Arbitration of Employment Claims

Cincinnati Bar Association

June 3, 2014

Kelly Schoening, Esq.

513-357-5284

Dressman Benzinger LaVelle psc

kschoening@dbllaw.com

What can you arbitrate?

Employment law issues, including but not limited to: Harassment Discrimination Wage and hour Most any type of employment claim

Class action lawsuits-this can be a huge benefit and cost savings

What cannot be arbitrated?

Worker’s compensation Unemployment benefits Employee pension or welfare plans Claims not included in the agreement

What is the benefit of arbitration?

No jury No court Nothing in public Try the case to a person selected by both parties Less time to settle dispute Final and binding-no appeals Save on legal fees

What is the benefit of arbitration?

Arbitrators have experience, unlike jurors Unlikely to get outrageous awards Schedule based on party’s availability Perceived as more employer friendly

What is the downside of arbitration?

Cost of arbitrator can be expensive Administrative fees are expensive Arbitrators can be less likely to dismiss case on

motion. It can be a final decision

What is the downside of arbitration?

Discovery can be greater Absence of Rules of Evidence More likely to split baby

How do you arbitrate?

Requires a valid and enforceable contract Supreme Court recently affirmed a decision allowing

an employer to use a mandatory arbitration agreement

Federal Arbitration Act strongly favors arbitration of claims

Federal Law preempts State law

Enforceable Arbitration Agreement

Carefully drafted to be enforceable Employee must knowingly and voluntarily

consent It can be a condition of employment-employee has

choice not to take the job

It should be a separate document-stand alone Do not embed terms in employment application or

handbook

Tips for Arbitration Agreement

Clear language Arbitrator should be authorized to rule on

summary judgments Decide between one or three arbitrators-three is

more costly Discuss how to choose arbitrators Choice of law clause

Tips for Arbitration Agreements

What remedies are available: equitable relief, attorney fees, punitive fees, compensatory damages, pre-award interest, damages

Confidentiality-protection of trade secrets Arbitrate all claims Statute of limitations At-will employment not amended Be compliant with FAA

Tips for Arbitration Agreements

Procedure for how to notify company of request to arbitrate File a written request to arbitrate Who will administer? (AAA, AHLA, CBA, etc.)

Consider having mandatory mediation prior to arbitration Agreement should be fair to employee (fees, etc) Agreement to arbitrate survives termination of

employment

Non-compete

May not want to arbitrate non-compete issues Courts give quick relief and hold quick hearings on these

matters Makes more sense to litigate non-compete/equity type

issues

Agreement as way to avoid jury

Can use arbitration to avoid jury Negotiate with opposing side to waive arbitration

if they waive jury trial It may make sense to try some cases to bench

rather than arbitrate Cost can be a factor

Case examples

Oxford Health Plans v. Sutter, 133 S. Ct. 2064 Supreme Court 2013

Plaintiff brought class action alleging delay and underpayment

Court ruled that claims must be arbitrated due to an agreement

Class actions must be specifically addressed in agreement

Case examples

AT& T Mobility v. Concepcion, 131 S. Ct. 1740 (2011)

FAA trumped state law State law cannot nullify binding arbitration for

class action claims

Case examples

Hergenreder v. Bickford Senior Living Group, 665 F.3d 411 (6th. Cir. 2011)

Employee signed arbitration agreement Agreement was in employee handbook Not enforceable-not knowing

Case examples

Quillion v. Tenant Healthcare Phila., Inc., 673 F.3d 221 (3rd Cir. 2012)

Employee twice signed document Received a brochure outlining internal grievance

procedure Agreement was enforceable

Case Examples

Ibarra v. UPS, 695 F3d 354 (5th Cir. 2012) Employee filed a grievance over termination Grievance failed Then employee sued in federal court for sex

discrimination Court ruled that case would proceed Gender claim not raised in union grievance and

not addressed in arbitration agreement

Case Examples

Rogone v. Atlantic Video, 595 F.3d 1131 (2nd Cir. 2010)

Agreement had reduced statute of limitations and fee-shifting

Court required employer to strike provision in order to enforce agreement

Some courts will allow re-writing of agreement

Thank you!

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