The proposed Arbitration Fairness Act (AFA) would prohibit all pre-dispute agreements to arbitrate in employment, consumer and franchise contracts. Although changes in the ideological composition of Congress mean that the AFA has little chance of enactment in the foreseeable future, mini-AFAs have been enacted banning pre-dispute arbitration agreements as applied to sexual harassment claims by employees of defense contractors and whistleblower claims by employees in the securities and commodities industries. This article charts a middle ground between those who would ban pre-dispute arbitration mandates in employment contracts completely and those who would leave them unregulated. After surveying the empirical evidence concerning arbitration and litigation of statutory employment claims and finding it inconclusive, the article finds that employer motives for imposing arbitration mandates on employees are diverse. Some employers seek a process that is less time-consuming and less costly than litigation while others seek to tilt the playing field to their advantage, suppressing employee claims. The article urges that when policed against abuses, arbitration can provide a fair forum that is more accessible for employees than litigation. It finds, however, that courts have not adequately policed arbitration mandates and recent decisions may undermine efforts of the arbitration community to self-police. The article proposes specific legislative reforms to ensure that employment arbitration mandates are not used to advantage employers at the expense of their employees and to ensure that arbitration provides a less expensive, less time-consuming and more employee-accessible process than litigation.
Martin H. Malin,
The Arbitration Fairness Act: It Need Not and Should Not Be an All or Nothing Proposition,
Available at: http://scholarship.kentlaw.iit.edu/fac_schol/743