Are Mutual Arbitration Agreements Legal

One area of scruples to which the courts are generally very sensitive is any biased method of selecting the arbitrator. For example, if the employer retains full control over the selection of the arbitrator, most courts have found the agreement unenforceable. Unfortunately, this is a somewhat difficult situation to detect, as employers often use seemingly neutral or independent agencies to provide arbitrators. However, in many cases, these agencies simply advertise to employers for their services and point out that they are a way to control the costs of workers` applications. There are also times when arbitrators deal regularly with an employer and depend on the income of that employer`s business. These are all factors that can influence a court in deciding whether an arbitration agreement is not applicable because it does not protect the employee`s right to a neutral party as an arbitrator. Colvin`s survey of dispute resolution procedures in the telecommunications sector, conducted in 2003, showed that 14.1% of companies in this sector had adopted a mandatory arbitration procedure and that these procedures applied to 22.7% of non-unionized workers in the sector (large companies instead adopted mandatory arbitration procedures) (Colvin 2008). For example, at Arnold v. Burger King, where an employee claimed she was raped by a superior while she was at work, the Ohio State Court struck down a forced arbitration agreement signed by the employee. The Tribunal found that the arbitration agreement was procedurally unacceptable because the bargaining power was at odds between the parties and was unacceptable on its merits, as it wished to include a claim to rape in its scope. The combination of procedural and unacceptable has therefore rendered the agreement unenforceable. This also applies to the situation of organized jobs where workers are represented by trade unions.

Trade union/management arbitration is often the end of the appeal procedure for workers covered by a collective agreement. Although mandatory employment arbitration is usually supplemented by the signing of an arbitration agreement, usually at the time of hiring, companies take arbitration simply by announcing that these procedures have been incorporated into the organization`s employment policy. 3.5% of companies had also adopted a mandatory conciliation with this second mechanism. With the 50.4 per cent of employers asking workers to sign an agreement, this means that a total of 53.9 per cent of all firms had adopted a mandatory work reconciliation by one of these two mechanisms in the survey.