Arbitration has long been a staple of traditional labor relations. With the increased availability of jury trials to plaintiffs in employment discrimination and sexual harassment cases, many employers are also looking to mandatory arbitration of employment disputes outside the union context as a means of eliminating what is sometimes viewed as the lottery mentality exhibited by juries. Moreover, employers hope to substitute through arbitration the more rational and realistic judgment of a professional arbitrator or panel of arbitrators. Arbitration typically involves the submission of disputes to a neutral individual or individuals selected by the parties. Arbitrators serve as private judges who are empowered to hear testimony, make findings of fact, and impose whatever remedies they deem appropriate consistent with the authority granted to them by the parties.
Arbitration is less formal than judicial proceedings, with less pre-trial discovery.
That feature results in a procedure which is less time-consuming and less expensive than a trial, particularly a jury trial. In addition, arbitration allows claims to be resolved outside the public eye. Unlike court filings, documents and materials connected with arbitration proceedings do not become matters of public record. As a consequence, many employers are utilizing mandatory arbitration clauses in employment contracts and employee handbooks. At least at present, the courts are upholding and enforcing these clauses, provided that they comply with state and federal laws governing arbitration agreements and provide some guarantee of fairness to the employee.