As a national employment lawyer, the National Employment Lawyers Association asked me to participate in a survey for employee lawyers across the country. The survey for national employment lawyers was long, detailed, and had a lot of great questions about employment litigation. Overall, the survey seemed to be aimed at determining if employee lawyers were less likely to accept an employment case if the employer was obligated to arbitrate their dispute or they opted to arbitrate instead of having their employment lawsuit decided in court.
The survey of employment lawyers was nationwide. While I have done employment cases in virtually every state of the United States, am a licensed California lawyer, a licensed Texas lawyer, licensed lawyer in Washington D.C., and a licensed Massachusetts lawyer, the largest part of my plaintiff’s employment law practice has always been in California. Beginning in the late 1990s, in California, the appellate courts began to require that if an employer required their employee to arbitrate their employment dispute, the employer had to pay the costs of the employment arbitration. One of my cases, Pinedo v. Premium Tobacco [AR – suggest a link to that appeal] helped to establish this important pro-employee rights arbitration policy for California employment law. Requiring employers to front the costs of binding employment arbitration sure saved the day. It had unfortunately got to the point where even my employment law firm which was merely statewide at the time had to think twice about whether we could represent an employee subject to binding arbitration because the costs we were asked to pay for employment arbitration had been over $30,000 on a simple breach of employment contract case. That means the arbitrator was paid more than $30,000 more than fifteen years ago.
While the law in California has required employers to pay for binding employment arbitration for almost fifteen years now, when I did the National Employment Lawyers Association survey, I got the distinct impression that many states still required employees to share the costs of employment arbitration with the employer.
Other themes of the National Employment Lawyers survey seemed to be that employment arbitrations might result in a greater difficulty in settling an employment case, or to win large damages in an employment case. While I do believe that obtaining punitive damages in employment arbitration presents a challenge (although I did get punitive damages in a sexual harassment case on one occasion), I am not convinced that arbitrators are less likely to award any other type of damage in an employment case, or they are more likely to award a smaller amount of damage in an employment case than a jury or judge would. To the contrary, I have read studies that arbitrators and judges often award more money than juries in cases, including employment lawsuits.
One criticism I do have of the employment arbitration process is that an arbitrator cannot order the parties to engage in mediation. Nor can arbitrators conduct settlement conferences. A case came out that holds it is a breach of the arbitrator’s contract to arbitrate if they force the parties into settlement discussions. Many courts do order that the parties to an employment lawsuit must attempt to mediate their dispute. Additionally, many courts have mandatory settlement conferences with judges that often resolve the employment lawsuit. Thus, I have found that decisions to voluntarily mediate tend to come later in employment disputes in arbitration than employment disputes in court. In addition, many lawyers defending the employer are less willing to mediate if the case is an employment arbitration. The lawyers defending the employers may be misinformed about their ability to win the employment arbitration, or they may believe it is easier and less of a hassle to arbitrate an employment dispute in a comfortable private office than to present a case to a jury that is often made up of working individuals and a judge.
Due to class action waivers where employees are expected to waive their right to a class action due to arbitration agreements, I suspect that employment arbitration will continue to be on the rise. So long as California state law requires that employers pay for the employment arbitration, I do not see employment arbitration as the death knell to employment disputes that are not class actions. As for the states the require the employee to pay half the costs of arbitration, I hope those states change their laws ASAP!