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Survey Highlights the Status of Employment Arbitration

May 1, 1997
Related Topics: Labor Relations, Featured Article
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The use of mandatory employment arbitration is so new that little research has been done into the use of these procedures. To find out how companies are using and structuring these plans, Christine Ver Ploeg, Mei L. Bickner and Charles Feigenbaum recently undertook a survey of employers. Results of the survey were featured in the January 1997 issue of the Dispute Resolution Journal, published by the American Association of Arbitrators. Here are some of the highlights:

How long have the procedures existed? Approximately 85 percent of the procedures have been implemented within the last five years, and approximately 20 percent have been implemented in the last 1.5 years.

Who is covered? Approximately four out of five plans cover all unrepresented employees.

How is the agreement enforced? Approximately 75 percent of employers require new employees to participate in the plan as a condition of employment. Only half require existing employees to participate; the rest encourage but don't require their current employees to do so. Approximately 25 percent of the plans are voluntary for both new and current employees.

Why were the arbitration procedures developed and implemented? More than 75 percent of employers cited concerns about litigation costs as their major reason for implementing their policies, and another 15 percent stated they adopted the policies to improve employee relations.

What disputes are subject to arbitration? Approximately half the plans surveyed cover most or all disputes arising out of employment. Approximately 25 percent cover termination only, and roughly 20 percent limit coverage to claims that otherwise would be litigated in court.

What are the provisions for employee representation? Ninety percent of the arbitration plans permit employees to be represented by their own advocates during arbitration.

How is the arbitrator selected? Nearly 85 percent of the plans surveyed provide for joint selection of the arbitrator.

What is the arbitrator's authority with regard to remedy? Two-thirds of the plans don't specifically restrict the arbitrator's authority with regard to remedy, although a minority place some limitation on monetary damages.

Who pays the arbitrator's fees? Approximately half of the plans call for the employers to pay arbitration fees, the other half provide for shared costs.

What has been the experience with the procedures to date? The majority of the plans have been in existence less than five years, and most of the employers surveyed had not yet arbitrated a single dispute, having resolved their cases before reaching the final stage of arbitration.

Workforce, May 1997, Vol. 76, No. 5, p. 54.

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