BIA REPORT
Employment Law Update
State and federal developments of interest to New Hampshire employers
June 2001 issue:
By Andrea Johnstone, Anne Scheer, and Terry Shumaker*
U.S. Supreme Court Endorses Arbitration of Employment Disputes
On March 21, 2001, in an extremely significant decision, the United States Supreme Court ruled that arbitration provisions in an employment agreement are enforceable under federal law. Circuit City Stores, Inc. v. Adams, 532 U.S. _____ (2001). This ruling settled years of conflicting opinions among lower courts as to whether employers could require employees to submit employment disputes to arbitration. Employers can now make a choice as to whether they will defend employment claims through arbitration or courtroom litigation. As with all choices in life, there are pros and cons to arbitration verses courtroom litigation for every employer. Generally it is believed that utilizing arbitration:
- Resolves disputes more quickly;
- Is less costly; and
- The decision-maker (arbitrators versus jurors) is more objective and less apt to be swayed by passion and prejudice.
On the negative side:
- It is difficult to overturn an arbitrator's unfavorable decision;
- Arbitrators tend to "split the baby" to resolve disputes;
- The process is less formal which may make discovery difficult, and evidence that would be excluded in a courtroom may be allowed; and
- More employees may utilize this forum.
The Circuit City decision did not address the practical parameters under which an arbitration provision will be enforced. Employers wishing to utilize arbitration agreements must be very careful in how the agreement is drafted. Lower courts have found arbitration clauses that are not reciprocal or are too costly for an employee to be unconscionable as a matter of law and, therefore, unenforceable.
Following the Circuit City decision, the New Hampshire Department of Labor issued a decision holding that an employee who executed an employment agreement containing a binding arbitration provision as the forum for resolving employment disputes is preempted from filing a wage claim with the New Hampshire Department of Labor, and is required to comply with the arbitration clause in the employment agreement. John F. Catalano v. Applied Biometric Products, Inc.
Ergonomics Standard Repeal
The Occupational Safety and Health Administration's ("OSHA") ergonomic regulations, which went into effect January, 2001, have been rescinded. These regulations had triggered fierce debate among representatives of the business community, organized labor, and employee interest groups. However, employers should be advised that even without these regulations, employees are still protected by state Workers' Compensation laws with respect to all work-related injuries, and OSHA still has authority to police work sites and cite employers for hazards, including ergonomic hazards, under OSHA's general duty clause.
Union Organization of
E-Businesses
New economy businesses are beginning to face union organizing campaigns. Recent lay-offs, company failures, falling stock prices and corporate retrenchment at dot-coms are believed to be the reason employees have started to show interest in union organizing efforts. Two such companies, etown.com and Amazon.com, are currently targets of union organizing campaigns of their distribution employees and customer service representatives. All companies are well advised to take steps to counter union organizing efforts long before a union appears at the doorstep, then it may be too late to stop the tide.
Copyright 2001. This article originally appeared in BIA Report, June 2001.
* Anne Scheer is admitted in New Hampshire.
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