Business Q&A: Arbitration quicker, less costly alternative for employers

Charlie Plumb, a labor and employment attorney with McAfee & Taft, discusses resolving employment disputes through arbitration programs. 

 

Q: With employment-related lawsuits consuming much of the judicial resources of Oklahoma's federal courts, do employers have any viable alternatives to resolving workplace disputes other than going to court?

Charlie Plumb is a labor and employment attorney with McAfee & Taft.

A: Yes. More and more employers are considering implementing mandatory arbitration programs as a more efficient way to resolve disputes. In arbitration, the parties to a dispute mutually select an impartial arbitrator who acts as both judge and jury, and whose decision the parties agree in advance to accept as final and binding.

Q: Why should employers consider implementing a mandatory and binding arbitration agreement program?

A: Defending a lawsuit can often be very costly for employers in terms of time, money and risk. It's an unfortunate business reality that many companies reluctantly settle lawsuits — even when they know the claim against them is weak — just to avoid the expense and uncertainty of a jury trial. For many employers, arbitration provides a quicker, less expensive and fairer method of resolving employment disputes.

Q: Are arbitration agreements enforceable?

A: Yes, properly designed employment arbitration agreements have been upheld at the district court and appellate court levels. In a recent case, Morrison v. Volkswagen Tulsa, a federal court in Oklahoma blocked an employee's attempt to file an employment lawsuit against her employer, ruling that she was required to submit all her employment claims to mandatory and binding arbitration according to the arbitration agreement she voluntarily signed when she went to work for the company. The court not only noted the Federal Arbitration Act favors disputes being resolved through arbitration agreements, but also recognized a number of recent cases from Oklahoma and the 10th Circuit Court of Appeals enforcing employment agreements like the one the plaintiff signed.

Q: What constitutes an enforceable arbitration agreement?

 

A: The Federal Arbitration Act applies only to written provisions in a contract. Therefore, a best practice is to prepare and distribute a separate document meeting the definition of a contract. A short clause or provision in an employee handbook is unlikely to be enforced. Employers should require all applicants and employees to sign an acknowledgment form representing they have received and read the agreement, that they understand the agreement, and they acknowledge their employment is contingent upon their acceptance of the terms. The bottom line is that a well-crafted arbitration program should be fair to both parties in a dispute.

PAULA BURKES, BUSINESS WRITER

Source: newsok.com