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Employment attorney Kelly Schoening of DBL Law provides basic background on the arbitration of employment claims. This slide show gives employers useful information on the pros, cons, ins and outs of the arbitration process.
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Arbitration of Employment Claims
Cincinnati Bar Association
June 3, 2014
Kelly Schoening, Esq.
513-357-5284
Dressman Benzinger LaVelle psc
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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