Forced Arbitration of Employment Disputes

Forced Arbitration of Employment Disputes

Most of us are familiar with the dreaded arbitration agreement, often included in purchase agreements and other consumer contracts. Essentially, the arbitration agreement forces you to give up your right to a trial by jury to resolve any potential legal dispute. Unfortunately, employers are including arbitration agreements in their employment documents, as well. What does that mean for employees?

Employment arbitration agreements are far too common

It has been estimated that nearly 15-25% of U.S. employers implement forced arbitration agreements with respect to disputes with employees. That's more than 30 million employees who are required to give up their right to have the court system resolve their employment disputes.

As a result, an arbitration firm chosen by their employer will be the only option for resolving an employee dispute with his or her employer. These provisions allow employers to essentially shield themselves from employment laws.

An Example of Arbitration at Work in Alabama

Although the case of Fonza Luke, a nurse at Baptist Princeton Medical Center in Birmingham, is not recent, it is quite significant in this area of the law. Luke had worked as a nurse for 26 years, when she was called to a meeting to discuss a new "dispute resolution program" the medical center was adopting. She, along with numerous other nurses, housekeepers and lab techs, were told to sign a form agreeing that they would submit any future employment-related complaints to an arbitrator hired by the medical center. The form meant that they were waiving their right to sue in court. The worst part, if any employee refused to sign the form, they were told they would be terminated.

Luke chose to protest

Luke had gotten wind of the new decision to implement the arbitration agreement so, before the meeting, she contacted her attorney who told her not to sign the form. Instead, she turned in the form unsigned. She was called in again a few weeks later and ordered to sign the form. When she again refused, she was not terminated – at least not then.

Luke's employer later found a reason to terminate her

Nearly three years later, Luke was terminated for alleged "insubordination," for attending a continuing education class for nurses. The hospital asserted that she was only cleared for one day off, but she took two days. After 30 years of being an excellent employee, receiving exemplary performance reviews, she was terminated.

Luke tries to sue Baptist for discrimination

Seeing that younger, white nurses had taken unapproved leave, but were not terminated, Luke filed a lawsuit against her employer for age and race discrimination. Imagine her surprise when Baptist argued to the court that she had waived her right to sue when back in 1997 when she was presented with the arbitration agreement. Even though she refused to sign the agreement, the hospital argued that she agreed to its terms, nonetheless, because she continued to work. The federal court agreed and Luke was required to submit her claims to arbitration. Of course, her claims were quickly dismissed by the hospital's arbitrator. Luke lost her job and her pension, because she had not yet reached retirement age.

If you have questions regarding employment arbitration, or any other employment matters, please contact Wrady & Michel, LLC, either online or by calling us at (205) 265-1880.

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