HR Management & Compliance

3 Criteria for Transparency and Equity in Arbitration

Recently, we’ve written a few posts discussing Google’s recent decision to end forced arbitration for employees. While the company had previously ended forced arbitration in cases involving claims of sexual harassment and sexual assault, it had, until now, left forced arbitration in place for other claims.arbitration
Arbitration is a controversial subject in employment law. On the one hand, it can make the resolution of claims less expensive and less time-consuming to resolve. However, critics argue that arbitration also gives employers more advantages and leverage than employees.
But arbitration can take many forms, and as with many complicated topics, the devil is in the details. One arbitration format might be very beneficial and fair to employees, while others might have hidden land mines that employees don’t notice until they’re already engaged in an arbitration dispute.
Among the many groups voicing opinions on arbitration surrounding the Google drama was End Forced Arbitration, through their Twitter account @endforcedarb. They advocate what they call “three criteria of transparency & equity.” Let’s look at each and briefly discuss why they’d be important to an employee advocate group.

Arbitration Is Optional

“Arbitration is optional for all forms of disputes between employers and their employees, temps, vendors and contractors.” Aside from the obvious optionality of arbitration, which gives employees more leverage, this criterion as written also applies to nonemployees and nonpermanent employees.
One continuing criticism of Google is that its temps, vendors, and contractors (TVCs) have fewer rights than its employees despite doing the exact same work in many cases.

No Class Action Waivers

“No class action waivers that prohibit employees from banding together to file suit.” In most lawsuits—now we’re talking traditional courtroom, not arbitration—employers have a big advantage in their sheer size and amount of resources. They can afford to hire top legal teams and spend large amounts on complex litigation activities like discovery.
In class actions, employees band together. But it’s not so much the aggregate of their individual resources that makes a difference. Rather, class action attorneys are more willing to put in the time and money to have a fighting chance in these suits because they get a percentage of what could be a massive settlement or judgment.

No Gag Rule

“No gag rule on keeping arbitration hearings, proceedings and settlements confidential.” Transparency is important to employee rights advocates because it empowers employees. Employers don’t want employees to know the size of settlements they could get by bringing in their own claims, nor do they want the public to know the details of alleged wrongdoing.
Employee rights advocates are often critical of arbitration clauses. However, it’s important to pay attention to the details of the provision in question, since each one is made up of individual terms and conditions.  These individual terms and conditions really determine the character of the arbitration agreement.