Jottings By An Employer's Lawyer

Friday, April 24, 2009

It's Not EFCA, Now It's FAN


While the EFCA debate has moved underground for awhile, perhaps the next challenge for employers may be FAN. FAN actually is not the acronym for the act in question, the Arbitration Fairness Act, but rather the Fair Arbitration Now coalition, a group formed to support it. Fair Arbitration Coalition, Website & Blog Announced. Here are links to the blog and to the website.

The bottom line of the Act, which has been introduced as H.R. 1020 is to make pre-dispute agreements to arbitrate employment or consumer disputes invalid. Not all employers will be impacted, but those who have set up alternative dispute resolution programs which culminate in binding arbitration will have those programs blown away by the legislation.

Obviously taking a lesson from the EFCA debates, the proponents are quick to point out that the act does not prohibit arbitration. Technically true, but the fact of the matter is it does prohibit arbitration as a condition of employment, which means as a practical matter, arbitration of employment law claims will be a thing of the past once the bill passes.

Will it pass? I have not seen a lot of handicapping on this one yet, but given that not all employers are impacted and that one of the big proponents of consumer arbitration, also banned, are financial institutions which are not exactly in favor with Congress (or the American public) at the moment, I would have to say the odds are in favor of its passage.

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It seems that H.R. 1020, or the Arbitration Fairness Act is going to be congress's answer to the Plaza LLC v. Peyett decision which blew away an individual’s right to have his discrimination claim heard. The Supreme Court, in my opinion, has over stepped its bounds by subjugating an individual’s statutory right to have his claim not only heard in court, but heard at all, by allowing a labor union to have the final say on whether an individuals discrimination claim go to arbitration or not.

It is plainly egregious that a labor union, which has wide discretion over whether or not to pursue a grievance to final binding arbitration, can render a potentially valid individual discrimination claim moot. For the life of me I cannot understand why Justice Kennedy went along with the majority on this one. I surely hope that congress steps in.

And for the record, I am a staunch supporter of organized labor.
 
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