Resolving employment disputes efficiently and effectively is essential for maintaining a productive and harmonious workplace. These disputes can arise from various circumstances and can significantly impact the employment relationship. A typical employment dispute could involve an employee’s belief that an employer has breached an employment contract, engaged in discrimination, harassment or retaliation, wrongfully terminated the employee or failed to properly pay them. Of course, the employer’s perspective is quite different: disciplinary action against the employee was warranted because the employee either violated workplace policies, was not putting forth maximum effort, engaged in misconduct, or termination was necessary as part of a lay-off caused by changed business conditions.
Employment disputes arise under a variety of federal and state laws as well as under common law. For example, in Florida the Florida Civil Rights Act governs employment discrimination and retaliation. There are also common law (non-statutory) claims that can be brought in Florida and other states for such things as breach of contract, negligent supervision and defamation. No matter the state in which an employee resides or an employer does business, most employment also is governed by a variety of federal laws including Title VII and the Federal Fair Labor Standards Act (FLSA) which regulates overtime pay among other wage and hour practices. These legal claims can be resolved either through litigation or arbitration.
In many workplaces today, employers and employees face a critical choice between using litigation or arbitration as a means to resolve employment disputes. The decision has profound implications for the resolution process’s time, costs, and privacy. Let’s look at each option separately.
Litigation begins with filing a complaint in court, leading to a series of steps, including discovery, trial, and possible appeal. The case is randomly assigned to a judge who may or may not have expertise in the area of employment law. The judge does not need to disclose potential conflicts of interest, like whether the lawyer on the other side of a case is a golf partner. The case proceeds through a lengthy discovery process which requires a party to produce documents, answer written questions posed by the other side and sit for, or attend, depositions where a party or its witnesses are subjected to oral questioning for hours. At the end of the discovery phase of a court case, either party can file a motion seeking summary disposition, meaning they expect the case can be resolved on the law, not the facts. If such motions are denied, the case next proceeds to the trial phase. Trial is conducted either before a judge or a jury consisting of lay-person citizens. Trials sometimes last for days or even weeks. If you (or the other side) believe the judge or jury’s decision is wrong, the decision can be appealed. An appeal can delay the finality of the case for months or several years. All the while the parties’ legal fees and expenses increase.
Moreover, the adversarial nature of litigation can strain employer-employee relationships, potentially leading to an acrimonious work environment. Worse, litigation is public. That means court documents and proceedings usually are accessible to anyone who is curious enough to find and review the court docket. This places an employee’s privacy and a company’s reputation at risk.
Arbitration proceedings, on the other hand, are private. No one other than the parties can see the pleadings, attend the proceedings nor find out how the dispute was resolved. A party initiates arbitration by serving a demand for arbitration on the opposing party. The parties then mutually select the person they wish to serve as an arbitrator. The person chosen as the arbitrator normally has a high degree of experience and expertise in employment law and unlike a judge in a court proceeding, must disclose all potential conflicts of interest.
Arbitrations generally are conducted in a private neutral location, not in a public courthouse. Arbitrations can either be governed by the published rules of the tribunal in which an arbitration is invoked or by rules the parties agree to, or both. Arbitration rules are designed to provide a fair but more abbreviated proceeding. The parties are required to disclose all relevant documents rather than be asked to produce them. It is not unusual for discovery to be more targeted and limited in arbitration. The parties also agree on a schedule and must abide by it. Parties must obtain permission from the arbitrator to file dispositive motions. Continuances are granted only for cause. The trade-off for this abbreviated process is that the dispute is resolved more expeditiously in a setting that protects the privacy and reputation of the parties. Further, there are few ways to appeal an arbitrator’s decision, so finality is almost assured.
But no one is denied statutorily granted rights in the arbitration of employment disputes. Arbitration has often been described as merely a change in the forum in which the employment dispute is resolved. Arbitrators can award all the same forms of relief that a court can award in statutory claims. An arbitrator’s decision is legally binding and can be enforced in the same way as a judgment obtained in court.