Responding to the onslaught of court rulings on work-related arbitration agreements, the American Arbitration Association (AAA) has modified its national rules for resolving employment disputes. According to the AAA, the changes are also intended to reflect the association’s commitment to fairness for employees. Note that these rules aren’t law, but most arbitration agreements include provisions agreeing to abide by them. The modifications took effect on Nov. 1, 2002.
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New Guidelines
Under the revised rules, if a worker files an arbitration case, the filing fee will be capped at $125 unless the arbitration plan specifies that the employee will pay less. The employer must pay all other administrative fees including the balance of the filing fee, hearing fees and any hearing room rental fees. The employer also must deposit the full amount of the arbitrator’s compensation in advance unless the employee chooses to pay a portion. The California Supreme Court has ruled that employees can’t be required to shoulder arbitration expenses other than a filing fee.
What’s more, arbitrators can no longer allocate the administrative fees or their compensation as part of an award—unless they believe a claim was filed for harassment purposes or is patently frivolous. Also, if the arbitration must be postponed, any fees related to the delay will be paid by whomever requested it.
Note that these changes apply to employer-imposed arbitration programs only. Individually negotiated employment arbitration agreements or contracts fall under a separate set of rules, the AAA’s Commercial Arbitration Fee Schedule.
Notification
As always, if you intend to use the AAA’s dispute resolution services in an employment arbitration program, the AAA requires that you notify it that you intend to do so and provide a copy of your arbitration plan at least 30 days before the planned effective date of your program. The AAA can decline its services if you don’t comply with this requirement or if your program doesn’t meet the AAA guidelines. To read the complete AAA rules, visit www.adr.org.