HR Arbitration and Eggs: Ditching the Bad Rap


Eggs got a bad rap as cholesterol-soaked death-bombs. Researchers later realized that cholesterol wasn’t so bad for you after all, but the real problem was the greasy bacon and sausage often served with eggs. The eggs weren’t the issue; the pairing with fatty pork was.

HR arbitration policies have a bad rap too. What should be a brutally efficient process can degenerate into runaway court-style discovery in a far flung city. But don’t blame arbitration. Blame the way the policy was written.

Sharp discovery limits and venue in the company’s backyard can both be written into an arbitration policy. Those two things alone can cut a defense spend by tens of thousands – and secure a convenient venue. They’ll also get respect.

In his latest Texas Lawyer article, Alan lays out:

1.    How far an arbitration policy can go to keep discovery lean-and-mean: The Ninth Circuit recently gave a nod to a three-deposition per side limit because the arbitrator could allow more depositions for good cause. Even one-deposition limits have passed muster in Oregon, Pennsylvania and Florida district courts.

2.    How little judicial second-guessing happens when arbitrators keep discovery streamlined: Bain Cotton is a prime example. There, the Fifth Circuit affirmed an arbitration award – even though the court cautioned it probably would have reversed had the same mistake been made by a district court.

3.    How hot employers have been in moving arbitration to their corporate backyard: The California legislature got so fed up with employer wins on arbitration venue that it passed a law. Now, California is the only state in the union to mandate home-grown venue for employment disputes when an employee “primarily” lives or works in the state.

4.    How SCOTUS approval of class action waivers could make arbitration even tastier: With a 5-4 conservative majority on the Supreme Court looking at class waivers now, there’s a good chance the waivers will get a nod. The chance to make all employment disputes mano-a-mano may be too good to pass up.

Arbitration – done right – is set to become the new black.

Read the full article for more.