Measures to Encourage and Reward Post-Dispute Agreements to Arbitrate Employment Discrimination Claims
24 Pages Posted: 18 Mar 2008
Since the Gilmer decision in 1991, the vast potential from using arbitration to resolve statutory employment discrimination has expanded into a burgeoning reality. Although employers rushed in to adopt so-called mandatory pre-dispute agreements to arbitrate statutory discrimination claims, advocates for employees criticized these agreements as being unfair and primarily because the agreements were made before any dispute arose. Employers could use their bargaining power to require as a condition of employment that employees opt out of the jury trial system allowing compensatory and punitive damage awards by requiring arbitration before knowing anything about an actual dispute. Because of continuing criticism of pre-dispute agreements to arbitrate, ongoing legal challenges to their enforcement, difficulties in challenging arbitrators' awards, and the growing interest in mediation, a number of employers have started to reconsider the value of mandatory arbitration. Now the vast potential for resolving employment discrimination disputes outside of the litigation process through arbitration that arose in 1991 may eventually diminish without some Congressional action.
Some commentators have argued that the only realistic opportunity for employers and employees to agree to arbitrate occurs before the dispute arises and will never occur after the dispute becomes a reality. This paper examines that postulate, disputes its validity, and asserts that even if employers and employees do not have strong incentives to agree to arbitrate after a dispute arises, then Congress (which is already seriously considering banning pre-dispute arbitration agreements) must step in to provide such incentives. Only Congress can give arbitration a new chance as a valid and viable dispute resolution tool when the parties agree to it after a statutory employment discrimination dispute arises. Within this paper, the author suggests incentives that Congress could create to inspire both employers and employees to agree to arbitrate their statutory employment discrimination claims after a dispute arises.
Keywords: arbitration, employment, discrimination
JEL Classification: J52, J71, K42
Suggested Citation: Suggested Citation