Opinion: Mandatory Employment Arbitration: The Winning Argument
• An arbitrator selection process, which according to the court's analysis, would always end up with an arbitrator proposed by the employer in an employee initiated proceeding.
• A requirement that the arbitrator — at the outset of the arbitration process — apportion arbitrator's fees between the employer and the employee, regardless of the merits of the claim. The district court had concluded that this practice served as a "model of how employers can draft fee provisions to price almost any employee out of the dispute resolution process." The employer represented that the fees for a qualified arbitrator would range from $7,000 to $14,000 a day, thus exposing the claimant to a daily obligation of $3,500 to $7,000. The claimant had worked as a deli clerk for several months and was seeking payment for rest and meal breaks as required by California law, presumably a sum far exceeded by the arbitration costs and rendering the arbitration prohibitively expensive.
• The process was presented on a take it or leave it basis with no opportunity for negotiation. Moreover, the terms of the provisions were not provided to the employee until three weeks after she had agreed to be bound by them. (All the employee received at the time of signing was a notice of the policy, not the actual four-page, single-spaced document itself.)
• The court stated that the arbitration policy allows the employer to unilaterally modify the policy without notice to the employee.
The court quickly dispatched the employer's argument that the provisions of the arbitration policy did not always favor the employer as well as the argument that the Federal Arbitration Act preempted the invalidation of the arbitration policy. The employee also sought to advance claims on behalf of a proposed class and this matter may ultimately be decided by the Supreme Court.
In the coming year, the issue of mandatory consumer and employment arbitration clauses will be hotly debated in Congress as well as by regulators. Learned legislators, scholars, and policy wonks will argue one way or the other.
When all is said and done, what may very well carry the day will not be lofty or erudite public policy arguments but simply the story of an employee who just wanted to state a claim but couldn't get around the obstacles stacked before her.
Perhaps the most convincing argument will be the tale of the deli clerk who just wanted to be heard.•