Exempting High-Level Employees and Small Employers from Legislation Invalidating Predispute Employment Arbitration Agreements

Abstract

On February 12, 2009, lawmakers in the U.S. House of Representatives introduced the “Arbitration Fairness Act of 2009.” That bill, if enacted, would invalidate any predispute arbitration agreement between an employer and its employee. Last year, the 110th Congress considered the narrower “Preservation of Civil Rights Protections Act of 2008,” which would have invalidated “any clause of any [predispute] agreement between an employer and an employee that requires arbitration of a dispute arising under” federal civil rights laws. This Article explores how best to structure any such invalidation of predispute employment arbitration agreements, in light of the rationales for and against regulation of the employment relationship generally, and in light of the rationales for and against regulation of employment arbitration agreements specifically. The Article argues that any legislation invalidating predispute employment arbitration agreements should be complete as to subject matter. More specifically, the legislation should cover both statutory employment discrimination claims as well as state common law employment claims. The Article further argues, however, that any such legislation should exempt from its coverage claims by or against certain high-level employees and claims by or against certain small employers. Finally, the Article goes on to consider how to structure these exemptions in a manner that would maximize the likelihood of identifying the entities most meriting an exemption while minimizing the likelihood of litigation over who qualifies for an exception. The Article proposes an exemption for high-level employees that borrows and modifies concepts from the Age Discrimination in Employment Act, the Family and Medical Leave Act, and the National Labor Relations Act. Further, the Article proposes an exemption for small employers that borrows and modifies concepts from Title VII of the Civil Rights Act and 42 U.S.C. Section 1981a.

Keywords: employment law, employment arbitration