For both employers and employees, litigation of workplace disputes in court can be time consuming, drawn out, and very expensive. An often welcomed alternative to litigating disputes is binding arbitration. More and more frequently, employers are asking their employees to sign arbitration agreements. Arbitration agreements require those who sign them to resolve any disputes by binding arbitration rather than in court before a judge or jury. While arbitration does not take place in a courtroom, it does resemble a trial in the sense that disputes are presented to a neutral party (an “arbitrator”) who hears the case and renders a final decision or award.
The benefits of arbitration are numerous. Arbitration is less formal and adversarial than a court proceeding, which can help preserve the relationship between the parties in the aftermath of a dispute. Rather than submitting the case to a jury with no legal background, the parties generally have the option of selecting an arbitrator who has experience or expertise in the subject matter of the dispute. The amount of documents and information exchanged between the parties (referred to as “discovery”) is limited in an arbitration setting, whereas parties engaged in litigation often must provide each other with significant amounts of discovery relating to their claims and defenses, which is both time consuming and incredibly expensive. Additionally, arbitration is private; there is no public record of the proceedings or decision and parties have the option of agreeing to keep the proceedings confidential.
Arbitration also often provides a much quicker resolution than litigation in that rather than waiting for their turn to be heard in court, parties are able to arbitrate as soon as they have prepared their case. There is much more finality provided by arbitration. A court order or jury verdict may be appealed which can extend the length of a dispute by months or even years. Due to state and federal arbitration laws that limit court intervention as well as laws facilitating enforcement of arbitration awards, binding arbitration decisions are, as their name would suggest, generally unappealable.
What does all of this mean for employers? Arbitration saves both employers and employees significant time and expense and allows them to more rapidly resume the working relationship or, if the situation dictates, sever ties cleanly. Courts have consistently upheld arbitration agreements and employers should consider them as an alternative to resolution of disputes in court.
Kastner Westman & Wilkins, LLC (kwwlaborlaw.com) is a Fairlawn, Ohio law firm that represents and counsels employers in all aspects of workforce management, state and federal legal compliance, labor negotiations, arbitration, OSHA, employee benefits, workers’ compensation, and defense of claims fi led with administrative agencies and state and federal courts.