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Mandating Mandatory Arbitration

July 1, 1997
Related Topics: Labor Law, Labor Relations, Featured Article
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Thanks to a recent Court of Appeals ruling, someday HR may not have to worry as much about how to handle lawsuits. The District of Columbia U.S. Court of Appeals has ruled that employers may require new hires, as a condition of employment, to waive all rights to a trial by jury with respect to any dispute relating to recruitment, employment or discrimination-including claims involving discrimination. Such waivers would require employees to go through arbitration, the tab for which the employer would pick up.
In Clinton Cole v. Burns International Security Services, the plaintiff had signed an employment agreement waiving his right to a jury trial and permitting Burns Security to opt for arbitration in the event Cole filed a lawsuit relating to his employment. In October 1993, Burns Security fired Cole, who filed a complaint in the U.S. District Court for the District of Columbia alleging, among other issues, racial discrimination and harassment. His complaint was dismissed and the trial court granted Burns Securities' motion to compel arbitration.
The decision will "have a dramatic impact on the number of cases that reach the courts," says William F. Kershner, a partner with Philadelphia-based law firm Pepper, Hamilton & Scheetz. "For businesses facing a growing number of lawsuits, many of which are frivolous but all of which are expensive to defend, the arbitration process offers a practical and cost-effective alternative."
But, with the 12 U.S. circuit courts at disagreement on the issue, will the decision stick? Kershner says the Supreme Court is likely at some point to make a final decision. When it does, the current ruling has several things going for it. First of all, the District of Columbia Circuit Court of Appeals is quite auspicious: three of the 9 current Supreme Court justices were recruited from that circuit.
In addition, the judge who wrote the decision, Harry Edwards, is well-known and respected in labor-and-employment law circles. "It's a dynamite combination for that decision to become the one ultimately adopted by the Supreme Court," says Kershner.
Workforce, July 1997, Vol. 76, No. 7, pp. 66-71.

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