The Laconic Law Blog

Will arbitration soon be banned for employment disputes? 

There appears to be a perfect storm converging in the area of arbitration.  The Wall Street Journal’s Law Blog asks today, “Is arbitration the new litigation?“  Referring to a positive article on arbitration written by the FT’s Patti Waldmeir, the post questions whether the pending Hall Street v. Mattel case before the U.S. Supreme Court will change things.  (The question is that case is whether the parties can agree to a more expansive appellate review of an arbitration decision by agreement.)  If the Court finds that the parties to an arbitration agreement can alter the provisions of the FAA, the decision might encourage creative employers to further refine their arbitration policies.

Perhaps the most significant change in the law of arbitration will come if Congress amends the Federal Arbitration Act to prohibit mandatory pre-dispute arbitration agreements.  Legislation was introduced in the 110th Congress in both the House (H.R. 3010) and Senate (S. 1782) in July 2007 to accomplish this.  The bills provide that “no predispute arbitration agreement shall be valid or enforceable if it requires arbitration of an employment . . . dispute.” 

Until such legislation passes, however, mandatory arbitration policies are still popular and generating collateral litigation.  The U.S. Court of Appeals for the Sixth Circuit held yesterday that continued employment was consideration for the implementation of an employer’s mandatory arbitration policy.  Lisa Seawright v. American General Financial Servs., Inc., No. 07-5091 (6th Cir. Nov. 13, 2007).

Tags: Arbitration, Litigation

This entry was posted on Wednesday, November 14th, 2007 at 11:00 am and is filed under Arbitration. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.