Employment Arbitration Practice and Procedure FAQs by My Employment Lawyer
By Neil Klingshirn
- I want to pursue a claim for employment discrimination but I signed an arbitration agreement, What should I do.
- What is a motion to stay a lawsuit for arbitration?
- Will the court grant the motion to stay for arbitration?
- Opposing arbitration sounds like a lot of work. What can I hope to gain?
- The court modified some terms but otherwise granted the motion to stay. What should I do now?
- What happens if I lose the appeal?
- How do I start arbitration?
- What if the agreement does not name an arbitrator?
- What happens after I demand arbitration?
- The arbitrator made a terrible decision in my case. Can I appeal from the arbitrator’s decision?
- I won at arbitration and the employer lost its appeal, but the employer will not pay the award voluntarily. How do I get paid?
- Where can I find more information about the arbitration of employment disputes?
A party to an arbitration agreement, here, the employer, can file a motion to stop, or “stay,” the lawsuit. If the court grants the motion, the lawsuit stops and the only avenue open for pursuing your claim is through arbitration.
You can oppose the motion to stay your suit in favor of arbitration. In that case, if you are in Ohio or the law of your state is similar to that in Ohio, the court should:
- Decide the question of arbitrability i.e., whether an agreement exists that creates a duty for the parties to arbitrate this claim.
- Deny arbitration unless the opposing party agreed to submit this dispute to arbitration. In deciding whether the parties have agreed to submit a particular grievance to arbitration, a court may not rule on the potential merits of the underlying claims.
- Decide whether the arbitration agreement covers the claim filed in court. A presumption of arbitrability exists that says a court should order arbitration of the particular claim unless it is positively sure that the arbitration clause cannot be read to cover the dispute. In other words, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration.
- In Ohio, the court must usually hold a hearing on these issues. See ORC 2711.03(B) and McDonough v. Thompson, 2003 Ohio App. LEXIS 4224 (Ohio App. , 2003).
- Before the hearing on whether to enforce the arbitration agreement, the court should permit discovery into arbitrability issues. These include whether:
- there a knowing and voluntary agreement;
- the agreement is unconscionable, lacks mutuality, limits rights or remedies or imposes costs that deter claimants;
- the agreement cover the parties (e.g., individual, non-signatories);
- the agreement covers the dispute filed in court;
First, you might be able to avoid arbitration altogether. Second, you should ask the court to modify or eliminate the most unfair terms of the arbitration agreement.
The most offensive terms are those that limit your right to file a claim, do discovery into it or obtain a complete remedy. Ask a court to strike those out. Argue that arbitration should only be a change in who decides the case, not an elimination of your rights.
Perhaps the most important terms to modify, however, are those involving costs. Remember that arbitration can be incredibly expensive, costing $15,000 or more just to pay the arbitrator and an arbitration service. A typical filing fee to get the case started is $1,500 or more. These costs are typically imposed on employees when they can least afford them, being after they have lost their job. If the practical effect of paying these costs will be to prevent you from pursuing your claim at all, you should ask the court to order the employer to pay them, or else let the case go forward in court.
Whether the court rules denies or grants the motion to stay, the losing party can immediately appeal the court’s ruling. Therefore, if you believe that the court made an error in its decision that an appellate court can reverse, you should immediately appeal it.
Once a court grants a stay and you decide not to appeal or you lose the appeal, you cannot pursue your claim any further in court. Arbitration is probably the only avenue open to pursue your claim.
You must start the arbitration process. Look at your arbitration agreement to see how you start the process. Normally you must file a demand for arbitration with the arbitration service, such as the American Arbitration Association, named in your arbitration agreement.
If the agreement does not say how to demand arbitration or how to pick an arbitrator and you cannot reach an agreement with the employer on how to do that, you can ask the court to appoint a neutral arbitrator.
The arbitrator or the arbitration service that provides the arbitrator will usually require a filing fee. It can be substantial. Nothing will happen until the filing fee is paid.
Once the filing fee is paid, the parties select an arbitrator, who sets discovery and hearing dates. At the point:
- Parties conduct discovery
- The arbitrator conducts the hearing
- The arbitrator makes a decision
The arbitration may put limits on the amount of discovery or the length of the hearing. If you could not get rid of those terms when you fought the motion to stay, you may have to work within those limits, so do so wisely.
The problem with arbitrations is that you have very little right to appeal. Specifically, you can appeal by filing a motion with the court of common pleas, at which point the court can enforce the award, vacate the award or modify the award.
Vacating the award
The court can vacate the award if:
- The award was procured by corruption, fraud, or undue means.
- the arbitrator was corrupt or impartial;
- The arbitrator was guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced.
- The arbitrator exceeded his or her powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.
If you succeed in challenging the arbitration award on any of these grounds, the court will refer the matter back for a new arbitration.
Modifying the award
The court can modify the award if:
- There was an evident material miscalculation of figures or an evident material mistake in the description of any person, thing, or property referred to in the award;
- The arbitrators have awarded upon a matter not submitted to them, unless it is a matter not affecting the merits of the decision upon the matters submitted;
- The award is imperfect in matter of form not affecting the merits of the controversy.
The order shall modify and correct the award, so as to effect the intent thereof and promote justice between the parties.
For employees who win at arbitration, the lack of an effective employer appeal is the silver lining of the grey cloud of mandatory arbitration. Unlike court cases, where an appeal can take a year or two and can be modified or overturned on many grounds, appeals from arbitration awards will usually be futile and over fast.
Go back to court and file a motion to enforce the award. The court will treat the arbitration award like any other court judgment, meaning that you will be able to use the court process to garnish bank accounts, attach liens to property and so on.
Try Mel's FAQs on:Questions and Answers, Wiki articles and Blog articles about arbitration agreements.
Contact Neil Klingshirn
AV rated Super Lawyer and Employment Law Specialist