Arbitration Policies
lnelson
670 Posts
Does anyone have an arbitration policy that I can review? We are adding this to our Employee Handbook and I would like some help with the wording of it before having our attorney go over it.
Thank you.
[email]Lisa@amberwoodproducts.com[/email]
408-938-1606 fax
Thank you.
[email]Lisa@amberwoodproducts.com[/email]
408-938-1606 fax
Comments
Creating an agreement to arbitrate is simple--the Federal Arbitration Act requires only a written agreement to arbitrate. Arbitration clauses in contracts are often only a line or two. However, you want to make sure that you will be able to enforce the agreement you enter into, and that it will provide what you are looking for. Decide what rules are going to apply (yours, AAA's, or someone else's), the source from which the arbitrator will be selected, who will be responsible for costs, etc. AAA rules impose some restrictions and disadvantages that you may not be willing to accept. Creating your own rules has benefits, but takes an investment of some time. There are other rules available, from alternative ADR providers. Your decisions on these and other issues will have an impact on the cost of the program, how effective it is in comparison with litigation, the speed with which cases are handled, and potentially on your ability to enforce the program. If these issues aren't considered before implementing the program, you may have an agreement that doesn't accomplish your objectives, or one that creates an agreement which you might have difficulty enforcing. I urge you to work with counsel experienced in the development, implementation and enforcement of arbitration agreements. I'm drafting an article on this topic for the July issue of the Virginia Employment Law Letter, and will be happy to see that you get a copy if you wish.
David E. Nagle
Editor, Virginia Employment Law Letter
[email]dnagle@leclairryan.com[/email]
There is much case law that needs to be taken into consideration in developing a program to be used in California, most notably the Cal. Sup. Court decision in Armandariz. The decision that came down yesterday from the 9th Circuit, in Ingle v. Circuit City, is also significant. That 9th Circuit decision illustrates the danger of including unenforceable provisions. The 9th Circuit described a part of Circuit City's program as "manifestly and shockingly one-sided" and found that the arbitration agreement "functions as a thumb on Circuit City's side of the scale." The Court found numerous provisions unconscionable and the entire contract unenforceable.
Well-crafted and implemented agreements to arbitrate are still enforced in California--it is just harder there than elsewhere. I was able to get an order compelling arbitration of discrimination claims in case filed in state court in San Fransisco just a couple of months ago.
I would be happy to see that you get a copy of the article. There will be caveats unique to California, but if you work with counsel experienced in arbitration issues, you can overcome the hurdles.
Ok, back to the real world. I am getting some legal counsel on adding an arbitration policy currently. Hopefully it will work out.