Labor & Employment Developments Blog

The third and final episode in the podcast mini-series - Termination Done Right - covers additional steps for employers to consider taking to minimize the damage in the event there is litigation over a termination decision.  Steps include:

1. Arbitration: In arbitration, parties agree to allow a neutral arbitrator to serve as both judge and jury and decide their dispute instead of going to court. Courts generally enforce arbitration agreements between employers and employees but there are pros and cons for employers to consider, including:

Pros:

No Jury – Taking the case away from a jury and allowing a trained arbitrator to decide the case is viewed as a positive by many employers;

Faster and Cheaper – In most cases, arbitration proceedings are resolved quicker than cases in court.  It is possible for arbitration proceedings to be cheaper than traditional litigation but it is not guaranteed;

Lower Settlement Values – One issue that drives settlement value is the threat of a runaway jury verdict but when juries are removed from the equation, the settlement value of a case tends to be lower;

More Privacy – While arbitration proceedings are not confidential, they are not as public as a court proceeding.

Cons:

Arbitration Fight – Employers may find themselves in costly court fights over the enforceability of arbitration agreements;

More Weak Claims – Unlike litigation in court, there are less opportunities to dispose of arbitration proceedings prior to a hearing, meaning that weaker claims are more likely to make it to a hearing in arbitration;

Costs – While arbitration has been traditionally viewed as a cheaper alternative to litigation, costs have been rising steadily over the years and some question whether the economics continue to favor arbitration;

No Appeals – Unlike a court case, arbitration decisions are rarely appealable, meaning that parties may be stuck with an obviously flawed decision.

Major Arbitration Providers include:

American Arbitration Association (https://www.adr.org/)

JAMS (https://www.jamsadr.com/)

NAM (https://www.namadr.com/)

CPR (https://www.cpradr.org/)

FORUM (https://www.adrforum.com/)

2. Jury Waivers: Jury trial waivers require employees to waive their right to have a jury decide their employment claims; a judge decides the case instead.

3. Class Action Waivers: Class action waivers limit employees to bringing only claims on their own behalf rather than joining a class action.

4. EPLI Coverage: Employment practices liability insurance, known as EPL insurance or EPLI, provides coverage to employers against claims made by employees alleging certain employment related claims.

Listen to the new episode of The Practical Employment Law Podcast for insights on these issues and more.

You can listen here.