Suppose that you are the HR manager for a company. Following a string of expensive law suits with former employees, your boss asks you to prepare a memo articulating whether or not your company should add a new policy in all employment agreements and employee handbooks which makes arbitration mandatory for any disputes arising out of employment with your company. Your boss is interested in reducing both the cost and public visibility of employment disputes, but she is also concerned about any legal problems with executory arbitration, including precedents, as well as any negative PR that might come out of such a move. Draft said memo thoroughly discussing the options and their implications. Be sure to address, at minimum, the following:
What are the advantages and disadvantages of arbitration as compared with the status quo of litigation? Are there any other alternatives worth considering?
Is executory arbitration legal? Are there any circumstances under which such an agreement might not be enforceable?
Even if it is legal, how are such agreements viewed generally? Are they perceived as fair among the general public? Are there any potential repercussions in that respect worth considering?
What are the implications concerning arbitration in terms of precedent and privacy? Do arbitration decisions create legal precedent? If so, can employees disclose information discussed in arbitration hearings to other parties without the company’s consent, such that it may be used in subsequent disputes?