On the Employment Front: A New Focus on Arbitration.
Arbitration, used properly, can help save costs for both sides in a dispute and give the court system much-needed relief. However, a recent New York Times article has cast light on the darker side of arbitration, in which corporations use it as a forced alternative system of justice in which judgments are sold to the highest bidder.
With more and more frequency, employers and corporations - even hospitals - have begun to include clauses in their contracts, compelling signers to resolve disputes through arbitration instead of in court. The range of the disputes these contracts cover is striking, often including serious matters such as sexual harassment, discrimination, and negligence. It is troubling enough that victims have no recourse to public courts under these contracts, but it becomes even more troubling when one considers that arbitration firms have a financial incentive to find in the favor of the defendants, who direct cases to them. In addition, arbitration proceedings rarely have the right to appeal that is such an essential safeguard to justice. And because arbitration decisions are private, there is no way to track whether justice is being served.
Ideally, both parties in a case would have a say in which arbitration firm to use. However, many of the contracts which force arbitration also put it in the hands of a specific firm. If an arbitration firm does not find in favor of the defendant they are under a real risk of losing what is for all intents and purposes a client.
This is a problem that our Firm has gone toe to toe with many times. In one recent employment case, the contract limited us to a single deposition even though there were two separate entities involved in the case, meaning we had to chose which company to depose! Forced arbitration often imposes such limitations on plaintiffs to cripple their cases while maintaining the arbitrator's facade of neutrality.
It is sometimes possible to prevail when faced with arbitration, however. For example, back in 2000 we defeated an effort to demand arbitration when the arbitration agreement would have allowed the defendant to change the terms but not our client. Sadly, such successes are too few and far between.
If you have questions regarding employment law matters, we invite you to contact Dennis Chong.