For years now, many companies around the country have embraced mandatory arbitration clauses as a standard and essential element for harmonious employer-employee relationships. Labor and employment lawyers have long recommended adoption of mandatory arbitration programs as a cost-effective alternative to suits for resolving employment disputes. And, while employer victory has by no means been historically assured in the arbitration forum, awards to prevailing employees tended to be smaller than they would have been in court, and exemplary damages were rare.
A recent spate of federal court opinions, however, has panicked employers and thrown a pall over the way some companies view the future of mandatory arbitration programs. Nervous that the U.S. Supreme Court will rule that binding arbitration clauses are generally unenforceable, employers have been tempted to abandon them.
