Mandatory Arbitration


Mandatory arbitration can be described as a process whereby the disputants agree to seek the services of a third party to help them solve a dispute instead of going to court. The third party, also known as the arbitrator, should be a trained person and should act according to the law. He or she is selected by the disputants and remains neutral to the ongoing case. This paper seeks to analyze mandatory arbitration in an employment setting. Advantages and disadvantages of the mandatory arbitration clause has been discussed as well as their connection to employees and employers.

Pros and Cons of the Mandatory Arbitration Clause in an Employment Setting

According to Zach (2009), arbitration is faster, cheaper and less tiresome than typical litigation. It helps the involved parties to avoid legal appeals, which can be time-consuming and sometimes costly (DelPo & Guerin, 2015). It also permits the disputants to choose an arbitrator, unlike in court, where the judge is assigned by the law (Zack, 2009). Arbitration is a private and confidential process. There are no records required for arbitration to take place (Carbonneau & Penn State Institute of Arbitration Law and Practice, 2006). In addition, the media cannot access the agreement reached upon by the disputants. Arbitration does not require a formal setting to take place (Colvin, 2009). Another advantage of arbitration is that the decision reached upon by the arbitrator is final. The disputants cannot appeal after the decision has been made.

Arbitration can also have disadvantages to the losing party, because the people involved cannot appeal even if the judgment is biased (Eaton, 2007). This process may not work well for the employees, especially if the decision is biased or corrupt. There is also limited discovery on both sides of the disputants. The process takes little time to complete and each party may have little knowledge about the other side. There are also no records or evidence of the process, which may cause problems in the future, especially when one of the parties revolts the decision (Zack, 2009). There are also possible disadvantages to the employer, because there is no remedy put in place for employees who have broken employment terms, conditions rules or regulations (Eaton, 2007). Another disadvantage is the likelihood that the administrative charges will continue even after arbitration.

An Example of a Mandatory Arbitration Clause

Any claim or controversy arising as a result of the breach of an agreement must be resolved by the means of binding arbitration. The case should be presented before a single arbitrator whose decisions should be unbiased and lawful (Carbonneau & Penn State Institute of Arbitration Law and Practice, 2006). For the purpose of finding the best arbitrator for the case, he/she should be a retired judge or a practicing attorney with not less that fifteen years of experience in the field (Eaton, 2007). The scene of arbitration shall be the organization’s board room or any other place that is agreed upon by the parties. The arbitrator should not award or punish to any party at any given time. The final award shall include an interest at the rate of five percent starting from the time of the act.

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Any disputant can apply for an injunctive relief from the arbitrator at any time until the arbitration award is resolved or rendered. A disputant may also, without having to wave any remedy, look for a court that has jurisdiction to offer a provisional relief or an interim that would protect their property or rights pending the appointment by the arbitrator (Carbonneau & Penn State Institute of Arbitration Law and Practice, 2006). In case the arbitrator finds out that the disputant has prevailed in the proceeding, he/she shall award the disputant with a reasonable amount as remedy for the incurred expenses (DelPo & Guerin, 2015).

When deciding the outcome, the arbitrator award must be reasonable. His/her award may be subjected in any court of law that has jurisdiction. Any verdict of the arbitrator shall remain strictly confidential, expect where the court decides otherwise.

The parties shall exchange names, telephone numbers and addresses of people who may have any knowledge of the relevant information pertaining to the issue under consideration (DelPo & Guerin, 2015). The parties are also required to avail any information regarding to non-privileged documents that are relevant to the claim (Brunet, 2006). The arbitrator may consider limiting the production of such documents based on duplication, undue burden or unreasonable expenses.

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Any exchange of information or documents shall not exceed 60 days from the time of the appointment by the arbitrator. Any party can request a deposition of the witness and the arbitrator at her or his discretion may grant this request to the party. Each side will have a limited number of depositions with a maximum of three witnesses with the duration of each questioning not exceeding four hours. The arbitrator may at his/her own discretion vary the number of hours spent for each of the witnesses.

Pros and Cons of No Records for Arbitration

No records are required for arbitration to take place. This fact makes case resolution quicker. It is a relief to the employer who may want his/her employees to get back to work as soon as possible (Brunet, 2006). It may also be a big disadvantage to the employer if the decision made by the arbitrator is biased. The case may reappear in the future and it may affect the productivity of the organization.

Pros and Cons of Choosing an Arbitrator for the Employee

The employee and the employer can jointly choose the arbitrator that they want to be involved in the dispute between them. Such selection ensures that the employees are satisfied with the third party. However, at the end of the process, the choice of the employees may be greatly influenced by that of the employer. This outcome may be harmful to the employees, especially when the arbitrator favors the employer.

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