by Stephen D. Hans | Feb 12, 2020 | arbitration for business owners
How Employment Arbitration Became Widespread Arbitration of employment issues was rare before the 1990’s. In fact, in 1992, a little more than 2 percent of the U.S. workforce was subject to mandatory arbitration for employment disputes. A study done by the Economic Policy Institute showed that use of mandatory arbitration rose after a series of Supreme Court decisions that began in 1991. To What Extent Has Arbitration of Employment Issues Grown? The following statistics show the increase of the mandatory arbitration in employment issues: During the early 2000s, mandatory employment arbitration doubled Today, more than 55 percent of employees must undergo mandatory arbitration An estimated 53.9 percent of nonunion private-sector employers use mandatory arbitration. A greater percentage of companies with 1,000 or more employers use mandatory arbitration. (65.1 percent) More than 60 million workers in the U.S. cannot sue but must arbitrate disputed employment issues Class Action Waivers in Arbitration Agreements One of the more recently disputed issues regarding mandatory arbitration has been regarding class action litigation. Employers began incorporating class action waivers in their mandatory arbitration agreements. A class action or collective lawsuit taken against an employer would seek damages for all employees in that class. For example, a sexual harassment lawsuit could seek compensation for a whole class of plaintiffs that were sexually harassed. Being forced to arbitrate a class action complaint could be very costly for employers and would complicate the direct, simplified nature of arbitration. For this reason, employers began including waivers in the agreements. The disputed legal point addressed whether mandatory arbitration included class action matters. The Supreme Court ruled that unless both parties...
by Stephen D. Hans | Aug 11, 2017 | arbitration for business owners
There is a reason that arbitration has gained a foothold in business disputes over the past 20 years, whether between employees and employers or between businesses. The Advantages of Arbitration Arbitration offers business owners advantages as a means of dispute resolution including the following: Lower costs. Generally, arbitration is less expensive than litigation. Faster resolutions. Nolo reports that a recent study done by the Federal Mediation and Conciliation Services that the average time for an arbitrated case to resolve is 475 days from filing. In contrast, the average litigated case takes 18 months to three years. Scheduling flexibility. Flexibility exists to schedule arbitration, such as during weekends or evenings, if necessary. Less formal rules of procedure than in litigation. Arbitration is not subject to the strict rules of evidence and procedure that a trial involves. It can help parties avoids delays, the long drawn out discovery and other tactics that drag out trials. Privacy. Typically, parties can keep matters private, which is advantageous for companies that want to avoid bad publicity. Two Recent Fox News Cases Where Employers Fought for Arbitration The New York Law Journal reported that in the recent lawsuit of July 2016 where News Anchor Gretchen Carlson sued former Fox News Chairman, Roger Ailes, she tried to avoid mandatory arbitration by only suing Ailes and not Fox News. As it turned out, the case settled outside of court for $20 million before the court ruled on Ailes’ petition to arbitrate. In August 2016, former Fox News Anchor Andrea Tantaros sued Ailes for sexual discrimination, and Fox News filed to compel arbitration. In this case, a judge...
