Recent Events Suggest That Employers Should Consider Arbitration

Presented by

Neal Mollen, Partner, Dara Freling, Attorney, Paul Hastings Janofsky & Walker

About this talk

Recent events suggest that it is a good time for employers to think -- or re-think -- whether they should be obtaining pre-dispute arbitration agreements from their employees. In 14 Penn Plaza LLC v. Pyett, 129 S. Ct. 1456 (Apr. 1, 2009), the Supreme Court resolved an open question regarding whether the parties to a collective bargaining agreement can together channel statutory discrimination claims into arbitration. A five member majority said they could, reasoning that the public policy favoring the arbitration of disputes reflected in the National Labor Relations Act applies with equal force to statutory claims such as those arising under statutes such as the Age Discrimination in Employment Act of 1967. This decision is a victory for the employer, and represents something of a counterpoint to other recent Court decisions that have restricted the utility of pre-dispute arbitration agreements and thus suggest caution for employers considering such a program. Recent decisions such as Hall Street Associates, LLC v. Mattel, Inc., 128 S. Ct. 1396 (2008) and Citigroup Global Markets, Inc. v. Bacon, ___ F.3d ___, 2009 WL 542780 (5th Cir. March 5, 2009), sharply limit the options available to parties that are disappointed by an adverse result in arbitration, even when the award reflects a manifest disregard for controlling law. We will discuss these recent decisions, as well as pending legislation that may further complicate the decision whether arbitration agreements make sense and, if so, when. We will also address best practices for how an employer can integrate these recent events into its own arbitration programs and how to prepare for the changing landscape in this area.

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