“This is indicative of the California lawmaker`s continued hostility to employment arbitration proceedings,” says Shareef Farag, a partner at law firm BakerHostetler. Yet, she says, some of the language of the law is blurred. While it applies to agreements concluded, amended or renewed after Jan. 1, she says, the word “expanded” is ambiguous. Their interpretation is that any staff member who signs an arbitration agreement before January 1 is still subject to the agreement. This case illustrates a trap for the unwary. Where an employer intends to require workers to sign an arbitration agreement as a condition of employment or continued employment, the employer must obtain a signed agreement. In addition, the employer should consider developing a system to verify that these signatures are collected, including the signatures of management. Jackson Lewis` lawyers are available to answer questions about this case and how to ensure that arbitration agreements are binding. In arbitration proceedings, the arbitrator sets procedures, milestones, evidential requirements and a timetable for the solution. Both parties present their evidence on the basis of the requirements set by the arbitrator and, compared to a long-term dispute, the arbitration usually ends more quickly. Arbitration deadlines are often months, while it can take years for disputes to close. Headlines and legal blogs warn employees about the many inconveniences.
Important empirical studies compare the results of the proceedings to less substantial results of arbitration and testify to the considerable gap between “arbitration and the conduct of the trial”. In a 2014 court case, Samantha Diggs v. Citigroup, Incorporated, the company`s use of an arbitration clause was described as “ruthless.” A comprehensive New Jersey law now prohibits the mandatory reconciliation of all rights to discrimination, harassment and retaliation in the workplace and severely limits employers from using confidentiality agreements as part of a settlement. “You definitely have to pay attention to it,” Haring says. “If California law applies, you could run into potential violations that cost a lot of money, and you have a lot of arbitration agreements that are no longer enforceable.” Of course, arbitration also has some drawbacks. Sometimes it`s neither faster nor cheaper than litigation, and arbitrators sometimes tend to “divide the baby,” even if the law is clearly on your side. Unfortunately, for the most part, there is no wise appeal if the arbitrator is wrong. However, arbitration remains an important instrument to avoid collective and collective actions which, otherwise, could take a company out of its activities, particularly in the area of wages and hours. In the meantime, the Human Resources DEPARTMENT of companies at risk may consider maintaining the company`s arbitration agreement but cannot impose it, adds Danielle Ochs, a partner at the law firm Ogletree Deakins. As of January 1, California employees will not be required to use arbitration as the only way to resolve claims of discrimination or sexual harassment, civil rights issues, or other workplace disputes. “You can choose to suspend your use of your arbitration agreement,” she says, adding that the safest option is to temporarily exclude them from employee agreements. “Once this issue is resolved, if the FAA`s presumption of preemption prevails, you can go to your employees at any time and ask them to enter into this agreement.” First, think about whether and for what types of labor disputes you want arbitration.
Arbitration has certain advantages. It is generally faster and less expensive than litigation. It allows a trained lawyer (often a retired judge) to dictate the outcome of the case instead of risking an adverse outcome with a jury.