Firm answers employer-employee dispute questions

Answer: Yes, on both questions. It should be noted that the U.S. Supreme Court has ruled that such arbitration procedures can be required for claims by the employee, but the Equal Employment Opportunity Commission or Missouri Commission on Human Rights would not be precluded from suing an employer on behalf of an employee. Hopefully, the EEOC or the commission would not elect to sue if they believe that an arbitration policy in place is fair and provides for an experienced neutral arbitration.

Caution: Be sure to have experienced council assist in preparing an arbitration policy. Most arbitration agreements call for decisions that cannot be appealed except on very limited issues. Some courts have said employees deserve broader rights of appeal. To ensure due process for both sides, we recommend the policy or agreement provide that either side may appeal on questions of law, and on whether a decision is supported by substantial evidence, to the state or federal court having jurisdiction for the dispute.

Q: If a company establishes an arbitration policy, does this mean that the company gives up “employment-at-will” rights? Would having a policy mean that a company would spend more time and money to arbitrate cases than they spend on lawsuits?

A: No, to both questions. If an arbitration policy is properly written, the company retains the employment-at-will doctrine, and employees can require arbitration only on cases where the company could be sued in court except for the existence of the arbitration requirement. Instead of increasing costs, an arbitration policy should decrease costs substantially. More important, an arbitration policy helps avoid the risks of long, drawn-out litigation and jury trials. If you have fired an employee who makes $50,000 per year, and it takes six years to get to trial, (four while the EEOC investigates and deliberates and changes its mind a few times, and two years after they issue a right-to-sue letter) you are facing potential back pay of $300,000.

Also, the employer who has paid attorneys $50,000 or more to litigate the case through depositions and discovery for two years or more feels that it has lost, even when the company wins the summary judgment or trial. Total costs for arbitration of a somewhat complex case should be $10,000 or less, compared with the $50,000 or more in a case in which the company wins by summary judgment in court. The six months that management staff is involved in preparation and trial of an arbitration case is far less expensive and disruptive than potentially six years in court litigation.

Q: Is it fair to employees to require them to use arbitration rather than suing in court?

A: Yes. Studies have shown that about 60 percent of cases where employees sue in court are dismissed by summary judgment and never go to jury trial. The employee never meets the judge and never sees the courtroom. Employees, obviously, are left with feelings of distrust when losing in that manner. Also, the case concludes in months rather than years.

Q: What are the ramifications of your arbitration policy regarding unions and the National Labor Relations Board?

A: An arbitration policy should provide that if employees are covered by a union agreement, the arbitration policy would apply only to the extent that the union agreement’s arbitration does not apply.

If your employees are not unionized, establishing an arbitration policy could destroy the union’s best argument favoring unionization. Studies have shown that the major reason employees unionize is because they feel they cannot get anyone to listen to their complaints. An arbitration policy provides a procedure for employees to file grievances and assures them that they will get an answer.

The U.S. Supreme Court has stated that arbitration of employees’ complaints has therapeutic value. For example, more than 30 years ago when I was in a law partnership which had five equal partners – each partner having his own notions of how to handle requests for time off and other day-to-day employment policy issues – I helped draft personnel policies and included a grievance and arbitration procedure. My secretary came to me, boiling mad about some special privilege that one of the partners had allowed his secretary to have, which placed a greater burden on others. I told my secretary to write up and file her grievance. She typed out a page or two regarding her grievance and handed it to me. However, the next morning, she came to me and asked to see her grievance. I handed it to her, and she tore it up. Writing the grievance had allowed her to examine her case and get it off her chest.

Donald W. Jones is an attorney with Hulston, Jones & Marsh, Attorneys and Counselors at Law in Springfield. He can be reached at dwjlaw@mindspring.com.