The Laconic Law Blog

As noted throughout the blogosphere (here, here, and here for example), the U.S. Supreme Court decided several employment-related cases today and agreed to hear several more earlier in the week (see here).  This term promises to be heavy on employment law decisions.

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The Workplace Prof Blog discusses a recent study regarding outcomes in employment arbitrations.  Previous posts on this topic at this blog are here, here and here.  The author notes an increase in the number of arbitrations over the years since the Supreme Court’s Gilmer decision and suggests that recent data shows that outcomes are less favorable to employees in arbitration both in terms of outcomes and damage awards.

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In a published decision today, the U.S. Court of Appeals for the Fourth Circuit affirmed an arbitration award in an FLSA class action.  The case is interesting because of the implications for employers using mandatory arbitration agreements.

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For those interested in our prior post on arbitration of employment disputes (Who Wins More In Arbitration?), the WSJ had an article yesterday on this topic.  The WSJ Law Blog also has a follow-up post with extensive commentary here.  The article mentions the case of Jamie Leigh Jones, who alleges she was raped by fellow employees at Kellogg Brown & Root, while working for the company in Iraq.  The company is attempting to compel arbitration of her sexual harassment claims.

We questioned earlier whether arbitration of employment disputes would be coming to an end soon.  (What is the future of arbitration?)  Perhaps we announced the death-knell of employment arbitrations too soon.  Overlawyered reports here on the win rates in arbitration vs. litigation in employment cases.  Employee advocates may want to reconsider their opposition to arbitration if the reported statistics are accurate.

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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).