In spite of the risks, are arbitration agreements advisable?
If you asked employers what they thought of arbitration agreements, you would get mixed responses. At the end of the day, a runaway jury award is what employers fear. If employers are willing to trade higher filing fees and the expense of an arbitrator for potentially lower attorney fees and lower risk of runaway jury awards, these agreements could be effective. Some have been surprised by the initial filing fees for arbitration and the fees for the arbitrators’ services. Arbitration agreements can be less expensive in the long run but are not necessarily inexpensive. The short answer is it depends on the individual circumstances of the employer or business. If the employer recognizes that arbitration agreements are not a cure-all for claims, then they can be a very effective tool in reducing litigation costs, avoiding risks of jury trials, and perhaps streamlining the process of resolving employee-related claims. WILLIAM J. O’NEILL is a member and chair of the litigation department at
