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Employment Arbitration

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On Wednesday, October 7, 2009, the U.S. Senate Judiciary Committee held a hearing to scrutinize the practice of dispute-related employment arbitration.

The hearing was held in response to the introduction of the “Arbitration Fairness Act of 2009” (S. 931/H.R. 1020), which would outlaw mandatory dispute arbitration unless required by a collective bargaining agreement.  The legislation is sponsored by Senator Russ Feingold (D-WI) and Representative Hank Johnson (D-GA). 

Judiciary Chair Patrick Leahy (D-VT)

During the Judiciary Committee’s hearing on the bill, Chairman Patrick Leahy (D-VT) cited estimates that “at least 30 million workers have unknowingly waived their constitutionally guaranteed right to have their civil rights claims resolved by a jury.” 

Witness Mark de Bernardo, a lawyer with the firm of Jackson Lewis in Washington, DC, countered by saying that labor organizations and employers have long embraced arbitration to resolve employment disputes and that the legislation would “effectively end arbitration in the non-union sector.”

In a related development earlier that week, the Senate voted 68 - 30 on October 6, to approve an arbitration-related amendment offered by Senator Al Franken (D-MN) to the Fiscal Year 2010 Department of Defense appropriations bill.  The amendment would restrict any organization that contracts with the Defense Department from using dispute-related employment arbitration.

Prior to the vote, SHRM and several associations sent a letter to all Senators urging them to oppose the Franken amendment.  The letter said, in part, that “eliminating arbitration will have serious negative implications for employees, because many cannot afford to bring their claims in court and therefore will abandon their claims altogether.”

Given the vote margin on the Franken amendment and the support voiced by Judiciary Committee Chairman Leahy for restricting the use of dispute-related employment arbitration, the Senate may be inclined to move quickly to vote on the Feingold / Johnson legislation. 

SHRM’s Government Relations staff will closely track this issue and alert SHRM members if this legislation advances further.



 In This Issue

Employment Arbitration
Democrats Target Pre-Dispute Arbitration in Employment

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The next issue of HR Issues Update will be published on Friday, October 30, 2009.
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