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Employment Blog

Arbitrate Your Employment Disputes?

Authored by Dean R. Dietrich
Posted on December 17, 2013
Filed under Employment

A recent decision from the 5th Circuit Court of Appeals overturned a ruling from the NLRB and held that an agreement between an employer and employee that provided for arbitration of any disputes (including class-action claims) was valid and did not violate the employees right to pursue collective action to complain about an issue in the workplace. This recent decision overturns decisions from the National Labor Relations Board that restricted an employer from using arbitration agreements as part of an employment contract with employees.

This decision allows employers to use an arbitration clause in an employment agreement to address employment disputes, there was a partial victory for the NLRB in this Court of Appeals decision. The Court held that an arbitration provision in an employment contract must clearly state that the signing of the agreement does not eliminate the right of an employee to address certain employment issues by filing a claim with the National Labor Relations Board. Claims would include retaliation or termination for engaging in concerted activity which is protected conduct related to employees seeking representation from a union.

While this decision gives back the opportunity for employers to enter into an employment agreement requiring arbitration of all types of disputes in the workplace; many employers are struggling with whether to use this tool as part of the employment relationship. Arbitration allows for an expedited procedure to determine a workplace dispute with an employee but also takes away some of the procedural protections that exist if a matter is tried in the courts. For example, sometimes the court procedures can stop a claim from proceeding to a hearing through summary judgment motions.

Arbitration is a vehicle used in collective bargaining agreements with a great deal of frequency to resolve disputes between an employer and a union over interpretation of the language in the collective bargaining agreement. Using this process to resolve employment disputes does have some attractiveness because of the expedited process and the ability to pursue claims through this informal process rather than with the formality of a court proceeding.

Employers need to assess whether this is something they want to use to control the cost of litigation and the process that will be followed to resolve employment disputes.