By Richard Hankins

In a recent interview with the publication Employment Law 360, I was asked “ Which aspects of employment law do you think are in need of reform, and why?” I responded:

Litigation of employment disputes takes too long and is far too expensive.  We lawyers benefit greatly, but at the end of the day I don’t think many plaintiffs or defendants feel very good about the process. We’ve had enough experience under our employment laws to be able to figure out ways to streamline resolutions of most of these issues. For example, discovery should be less oppressive, and I think the courts and congress should focus on encouraging, rather than discouraging, arbitration agreements.

This does not seem likely to happen, however.

Tomorrow, at 2:00 p.m., the U.S. House Committee on the Judiciary, Subcommittee on Commercial and Administrative Law will hold a hearing on the proposed Arbitration Fairness Act of 2007 (H.R. 3010), which would ban pre-dispute arbitration agreements regarding employment, consumer, or franchise dispute claims.

The following witnesses have been announced:

Panel I:

Laura MacCleery
Director
Public Citizen's Congress Watch Division
Washington, DC

Richard Naimark
Senior Vice President
American Arbitration Association
Washington, DC

The Honorable Roy E. Barnes
The Barnes Law Group, LLC
Marietta, GA

Ken Conner, Esq.
Wilkes & McHugh, P.A.
Washington, DC

Panel II:

Deborah Williams
Annapolis, MD

Cathy Ventrell-Monsees, Esq.
Law Offices of Cathy Ventrell-Monsees
Chevy Chase, MD
on behalf of the National Employment Lawyers Association

Peter Rutledge
The Catholic University of America
Columbus School of Law
Washington, DC

Theodore G. Eppenstein, Esq.
Eppenstein and Eppenstein
New York, NY

The vast majority of these witnesses are expected to testify in favor of the Act’s prohibition of pre-dispute arbitration agreements.

• Public Citizen is a national, nonprofit consumer advocacy organization founded in 1971 to represent consumer interests. It has taken a strong stance against mandatory arbitration.
• Former Georgia Governor Roy Barnes, a Democrat, currently represents plaintiffs in consumer fraud cases.
• The law firm of Wilkes & McHugh has offices in eight states and is a prominent advocate for plaintiffs in nursing home abuse cases.
• The National Employment Lawyers Association has advocated for passage of the Arbitration Fairness Act.
• Deborah Williams is a former franchisee of the Coffee Beanery in Maryland who had a bad experience in arbitration over alleged deceptive business practices by the franchisor. Her story is featured on the website peopleoverprofits.org, which has advocated against mandatory arbitration.
• Theodore G. Eppenstein Is a partner in a firm that represents investors in securities fraud matters. His firm issued a press release about the upcoming testimony, stating: “Ted will propose to the U.S. Congress that the public be given back their constitutional right to a jury trial, and will recommend the formation of a new arbitration alternative that is fair to public investors -- outside of the securities industry where cases are now held -- for adjudicating brokerage and financial industry disputes.”

Richard Naimark can likely be expected to testify that the American Arbitration Association’s rules ensure a fair resolution process.

Peter Rutledge is a Professor at Catholic University Law School, where he teaches international dispute resolution. Prior to entering the academic world, he clerked for Supreme Court Justice Clarence Thomas and then practiced with Wilmer, Cutler & Pickering. He is co-author of the treatise International Civil Litigation in United States Courts. Our cursory search did not locate any public statements on the Arbitration Fairness Act.  Professor Rutledge has written a law review article asserting that the bill would create harm to consumers and employees. (h/t: Consumer Law and Policy Blog).

Through witnesses or statements from the bill’s supporters, the subcommittee may hear the story of Irene Liebert, a 61 year old woman whose credit card was stolen and ended up being ordered by the National Arbitration Forum (NAF) to pay $46,000 . It may or may not hear about the recent arbitration award granting former and current employees of Ecolab's Pest Elimination Division approximately $27.6 million for alleged wage and hour law violations .

We can only hope that the subcommittee will hear some positive things about employment arbitration. For example, in the excellent Negotiation Blog, Southern California Arbitrator Victoria Pynchon recently cited some interesting “ Statistics on the Differences between Arbitration and Litigation Procedures, Cost, Duration and Outcome,” including the following regarding employment claims:

• Employment claims take 650 to 720 days to be resolved in court, according to the National Center for State Courts;
• The median time to resolve an employee dispute by arbitration is 104 days;
• Median monetary awards for successful employment law claimants are greater in arbitration than in court—$100,000 in arbitration compared with $95,554 in court; and
• The “win-rate” for employees is at least as favorable as an individual’s win-rate in courts.

Additional Reading:

Arbitration of Employment Disputes: The New Privatization of the Judicial System, by Ross Runkel, Editor, Employment Law Memo ( April 1, 2004).

Mandatory Arbitration: Why Alternative Dispute Resolution May Be the Most Equitable Way to Resolve Discrimination Claims, by David Sherwyn, J.D., Cornell University School of Hotel Administration (July 2006)

• WATCH LIST: The Arbitration Fairness Act of 2007