Arbitration

Employers’ Forced Arbitration Agreements

For decades, employers have been forcing employers and applicants for employment to sign arbitration agreements. Today, most employers require employees to sign arbitration agreements as a condition of employment. The employee is given no choice, either accept it and be hired, nor reject it and lose a job.

In New Jersey, there is no right to appeal an arbitration determination, except on very limited narrow grounds, such as corruption, fraud, undue means, misconduct, refusal to hear evidence, and/or exceeding authority. Further, discovery is limited in arbitration, as opposed to court proceedings. Arbitration is also private, as opposed to litigation in court, which creates a public record.

The Supreme Court of the United States continues to broadly interpret the Federal Arbitration Act (FAA) in favor of the employer and against the employee. Some states, including New Jersey, have attempted to curtail the employer’s ability to force employees to sign arbitration agreements. However, courts have stuck down those statutes under the Supremacy Clause of the US Constitution as they conflict with the FAA. Only Congress could curtail forced arbitration. However, that is unlikely in the near future as Republican lawmakers who are in favor of mandatory arbitration, control Congress.

The purpose of arbitration agreements is to take away the constitutional and statutory rights of the employees to file any claims against the employer in court. Instead, the employee must submit any claims against the employer to binding arbitration.

When an employee signs an arbitration agreement, and the agreement itself is valid, any claims the employee makes against the employer must be submitted to an arbitrator, who is usually paid by the employer.

Employment claims in arbitration tend to favor the employer, because it is the employer who pays the arbitrator, and many arbitrators are former judges or former corporate counsel for employer/corporate defense law firms.

Because of this reason, if an employment attorney can make a valid argument that the arbitration agreement is not enforceable, the attorney will ignore the arbitration agreement and file the employee’s claim in court. In such a situation, the employer may then file a motion to compel arbitration. If the employer wins that motion, and unless there is an appeal, the case will be sent for binding arbitration, rather than remain in court. If the employer loses, the case will remain in court and proceed accordingly, unless the employer appeals the denial.

It is important to note that in arbitration, the employee does not lose the right to file any claims against the employer. He simply loses the right to file the claims in court. In arbitration, the arbitrator must accept all common and statutory claims against the employer. While the employee is also entitled to discovery in arbitration, the decision whether to grant/deny discovery is made by the arbitrator, who, as noted, tends to favor the employer.

In addition to representing employees in Court, Chatarpaul law also represents employees in arbitration proceedings.

Chatarpaul Law’s Success in Defeating Arbitration Agreements in Court

An employment lawyer will almost always attempt to defeat an arbitration agreement for the reasons mentioned above. The following are a few cases in which Chatarpaul Law was successful in defeating an arbitration agreement including Marcello et al v. Corbion d/b/a Caravan Ingredients, Davis v. Corbion d/b/a Caravan Ingredients and Thomas v. Ally Bank and Luxury Auto Haus.