Don’t Be Like Alex Rodriguez … Taking A Swing At Your Employer’s Arbitration Agreement
You May Be Able to Contest Against the Agreement
By Attorney Scott Behren
Special to THELAW.TV
Many have read of the recent travails of all-star baseball player Alex Rodriguez (aka A-Rod) and his suspension from baseball. A-Rod’s 162-game suspension from baseball was prompted by a mandatory arbitration provision he had with his employer, the New York Yankees, and Major League Baseball. A-Rod is currently attempting in court to vacate the arbitration award entered against him, which is probably a long-shot.
Most employees would think that they have little or nothing in common with a baseball superstar such as A-Rod, but they would be wrong. In fact, many employers have their employees sign agreements that require them to proceed with any claims against them through mandatory arbitration. Today it is estimated that 15 to 20 percent of all employees are subject to forced arbitration agreements, which is about 25 percent of America’s non-union workforce. These documents are typically one of many legal documents that employers have employees sign when they first become employed. They are included in piles of documents that new employees get with little or no opportunity to review, which many times include non-compete agreements, employee handbooks, and arbitration agreements.
So what is arbitration? Arbitration is another process to resolve legal disputes other than the court system. Typically, a retired judge or lawyer will be selected as an arbitrator to hear your claim instead of a judge or jury. In most cases, it will be an expedited process without the same opportunity to conduct discovery that you may have with the court system. At the end of the arbitration hearing, the arbitrator will issue a ruling, which in most cases is very hard to contest with the court system, other than in extreme circumstances. There are also virtually no basis to review or appeal the arbitrator’s decision. Many employers like the arbitration process because it is quicker, less expensive, and eliminates the possibility of a runaway jury verdict. Most employees don’t like the process, as the arbitration process limits the discovery that an employee can obtain, prevents a trial by a jury of their peers, and gives no ability to appeal the decision of the arbitrator.
If you signed an arbitration agreement with your employer, the next question is whether or not you can be forced to arbitrate against your will. The answer is, “it depends.” One basis to contest a forced arbitration agreement would be based upon procedural unfairness or unconscionablility. In some instances, a court will not force an employee to proceed to arbitration, where they were given an agreement to sign with no meaningful opportunity to review the documents or understand its contents. Sometimes, a court will refuse to enforce an arbitration agreement, where the employee had no meaningful opportunity to review or understand the agreement.
Another basis to attack a forced arbitration agreement is based upon substantive unfairness or unconscionability. In many cases, arbitration agreements try to impose the expense of paying the arbitrators upon an employee, which in many cases would be much greater than the filing fees to bring a case in a court of law. In some cases, an arbitration agreement will attempt to limit the remedies or damages available to an employee. For instance, most wrongful discharge claims, such as under Title VII, allow the employee to recover punitive damages and, if they prevail, attorneys’ fees. Sometimes arbitration agreements attempt to eliminate the ability of an employee to recover punitive damages and attorneys’ fees. In many instances, a court of law will refuse to enforce an arbitration agreement if an employee is not given the same legal remedies available to him or her in a court of law, or if the fees an employee would have to pay for arbitration are excessive.
There are current attempts in Congress to change the status of this law. In particular, to address the problem of forced arbitration, Senator Al Franken (D-MN) and Representative Hank Johnson (D-GA) recently introduced the Arbitration Fairness Act (AFA) of 2013. More than 50 diverse organizations endorsed the bill. Articles by U.S. Senator Sheldon Whitehouse (D-RI) and conservative columnist Paul Samakow show why ending forced arbitration should be a bipartisan issue. The Arbitration Fairness Act would amend the Federal Arbitration Act by making it unlawful for employers to impose arbitration on employees, except when knowingly and voluntarily agreed to after the dispute arises or pursuant to a collective bargaining agreement.
In the event you have a legal claim against your former or current employer and have signed an arbitration agreement, you should consult with an experienced employment law attorney to discuss whether you can contest the enforceability of such an agreement.
The author, Scott M. Behren, Esq., is a trial lawyer in Florida who focuses much of his practice on employment litigation issues and can be found at www.behrenlaw.com or his employee rights blog www.takethisjobnshoveitblog.com.