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Arbitration or Frankenstein: Have Employers Created A Monster?

September 18th, 2020 Victoria Breese

Arbitration is a private form of dispute resolution where conflicting parties choose a third party to resolve a dispute. Rather than filing a lawsuit in court, parties in arbitration privately resolve a conflict behind closed doors. Employers first created this process to lower legal costs and hold disputes in a venue that might be more sympathetic to them. For example, some employers think that arbitrators, who may be retired judges or business people, are more impartial than typical jurors and less likely to be influenced by emotion in rendering a decision.

Is Arbitration Employers’ Frankenstein?

In Mary Shelley’s classic novel, Frankenstein, a young scientist creates a humanoid creature that turns out to be a monster. Recently, those in the legal field have been questioning whether employers also unknowingly created a monster with the innovation of arbitration disputes. Some employment lawyers have started to file mass arbitration claims for thousands of employees at once. For example, last summer, lawyers hit DoorDash with roughly 2,250 employee claims in one day. According to federal court documents, DoorDash was “scared to death” at this onslaught of claims. Some employers may not be equipped to handle a sudden increase in arbitration demands.

Will Employers Try To Destroy Their Own Creation?

In response to increasing arbitration claims, some employers are now thwarting their own creation altogether. For example, some companies have refused to pay dispute fees so that claims may not proceed. Labor rights groups have previously criticized the arbitration process as unfair for employees. Yet, in 2011, the Supreme Court upheld that arbitrations are a lawful way for employers to resolve disputes (see AT&T Mobility LLC v. Concepcion). While employers have upheld arbitration as an ideal form of dispute resolution for decades, increasing claims may mean this creation’s demise. Time will tell if employers decide to forgo arbitration altogether or modify the system so that they can more effectively deal with increasing claim volume.

Can Employers Make Employees Sign Arbitration Agreements?

While your employer typically can’t force you to sign an arbitration agreement, you could face severe consequences if you don’t sign. Because courts have upheld the legitimacy of arbitration, employers usually can fire or refuse to hire someone who refuses to sign these agreements. However, an agreement could be legally unenforceable if it is too biased in favor of one party. So, if you are unsure whether to sign an agreement, you should speak with an expert employment attorney.

Seek Legal Assistance Today

If your employer has violated your rights in the workplace, seek legal assistance today. The Working Solutions Law Firm, located in New York City, can assist you. Contact us today at (646) 430-7930 to schedule a free case evaluation and receive experienced legal counsel.