Binding Arbitration of Employment and Wrongful Termination Cases
Many empl0yers make their new hires or existing employee sign a mandatory arbitration agreement which states that an employee must bring all disputes with that employer to arbitration and not in court. This is a typical practice that benefits employers although sometimes there are advantages to these agreements for employees as well.
The first thing your attorney should do is to review the arbitration agreement and determine if it's valid and enforceable. The courts articulated a number of factors which determine whether the agreement you signed is in fact valid, known as Armendariz factors. Once it's determined the binding arbitration agreement is valid, your attorney will submit your claim to one of the arbitration organizations such as AAA (American Arbitration Association) or JAMS (Judicial Arbitration and Mediation Services). From that point, your case will be handled in substantially the same way by an arbitrator as it would be by a court where your case would have been filed.
The main advantage of arbitration as opposed to a trial for employers and the main reason they favor such agreements is the fact that they won't have to face a potentially angry jury who will hit them with a huge verdict based on personal biases and emotions. Arbitrators are known to be more conservative, and they issue very large awards far more rarely than a jury would. Obviously, this only matters in cases that have a significant emotional appeal (i.e. long term employment at a large company coupled with egregious harassment or discrimination).
There is a number of benefits to arbitration for the aggrieved employee as well. The employer has to pay the arbitrator's hourly fee, which increases a pressure on the employer to settle the case, especially if it's a smaller case. The employer would have to think whether it's worth spending $20,000 - $50,000.00 on the arbitrator's fees considering the value of the case. Also, the fact that the arbitrators are generally more conservative and are not guided by emotions when they issue decisions can actually be helpful to claimants, in cases where there is damaging evidence against the plaintiff (such as recent criminal history, rude e-mails to manager, bad performance reviews, or if the claimant's personality is less than warm and fuzzy).
Generally, the arbitrator's decision is not subject to appeal except in the most exceptional circumstances. Because so many arbitrators are pro-employer (since they get most of their business from employers) and because that one person will be making all the decision on your case, it's critical to choose an arbitrator who is known to be both fair and knowledgeable in employment law and wrongful termination issues. You don't want to be in a situation, where the arbitrator would have to be learning the basics of wrongful termination laws through your case. Don't assume that just because a potential arbitrator is a retired judge, who sat on the bench of 20 or more years it means that he knows employment law. It really doesn't. It only means that he was presiding on many hearings and trials, but it doesn't mean that he keeps up with the rapidly changing employment laws and will be able to correctly rule on the specific issues of your case.
The first thing your attorney should do is to review the arbitration agreement and determine if it's valid and enforceable. The courts articulated a number of factors which determine whether the agreement you signed is in fact valid, known as Armendariz factors. Once it's determined the binding arbitration agreement is valid, your attorney will submit your claim to one of the arbitration organizations such as AAA (American Arbitration Association) or JAMS (Judicial Arbitration and Mediation Services). From that point, your case will be handled in substantially the same way by an arbitrator as it would be by a court where your case would have been filed.
The main advantage of arbitration as opposed to a trial for employers and the main reason they favor such agreements is the fact that they won't have to face a potentially angry jury who will hit them with a huge verdict based on personal biases and emotions. Arbitrators are known to be more conservative, and they issue very large awards far more rarely than a jury would. Obviously, this only matters in cases that have a significant emotional appeal (i.e. long term employment at a large company coupled with egregious harassment or discrimination).
There is a number of benefits to arbitration for the aggrieved employee as well. The employer has to pay the arbitrator's hourly fee, which increases a pressure on the employer to settle the case, especially if it's a smaller case. The employer would have to think whether it's worth spending $20,000 - $50,000.00 on the arbitrator's fees considering the value of the case. Also, the fact that the arbitrators are generally more conservative and are not guided by emotions when they issue decisions can actually be helpful to claimants, in cases where there is damaging evidence against the plaintiff (such as recent criminal history, rude e-mails to manager, bad performance reviews, or if the claimant's personality is less than warm and fuzzy).
Generally, the arbitrator's decision is not subject to appeal except in the most exceptional circumstances. Because so many arbitrators are pro-employer (since they get most of their business from employers) and because that one person will be making all the decision on your case, it's critical to choose an arbitrator who is known to be both fair and knowledgeable in employment law and wrongful termination issues. You don't want to be in a situation, where the arbitrator would have to be learning the basics of wrongful termination laws through your case. Don't assume that just because a potential arbitrator is a retired judge, who sat on the bench of 20 or more years it means that he knows employment law. It really doesn't. It only means that he was presiding on many hearings and trials, but it doesn't mean that he keeps up with the rapidly changing employment laws and will be able to correctly rule on the specific issues of your case.