Compulsory arbitration of non-union employment disputes

In response to costly legal battles and proliferating causes of action for alleged employer misconduct, employers in the United States are beginning to require their employees to sign contracts that mandate binding arbitration of any employment dispute. These arbitration contracts have been the focus of much litigation because they compel employees to waive their right to sue their employers for employment discrimination, tortious conduct, and any other dispute that arises out of the employment relation. In Gilmer v. Interstate / Johnson Lane Corp. (1991), the U.S. Supreme Court cracked opened the door to the legitimacy of these contracts by sanctioning compulsory arbitration of an age discrimination claim. In the ensuing years, lower courts nationwide, except in the Sixth Circuit (Michigan, Ohio, Kentucky and Tennessee), have interpreted Gilmer to mean that employees can be required to arbitrate almost any employee rights question, provided that certain procedural guidelines are followed. This article presents an overview of the law and the literature in this area to assist human resource managers in designing a compulsory arbitration policy that will both survive legal scrutiny and operate to the mutual advantage of both employer and employee. © 1996 JAI Press Inc