The conventional wisdom is that employees asserting discrimination claims prefer to litigate in court, while employers prefer arbitration. Some employers impose arbitration agreements on employees who have little to no bargaining power, and the issue whether such agreements to arbitrate should be enforced has generated a fair amount of controversy. The Senate is considering—and many expect it to pass—a bill to be called The Arbitration Fairness Act of 2009 that would make pre-dispute mandatory arbitration clauses in employment agreements unenforceable unless provided under the terms of a collective bargaining agreement.
The American Arbitration Association (AAA) has, since November 2002, distinguished in its arbitration rules between employer-promulgated plans and individually negotiated contracts and agreements. As to the latter, the rules provide for splitting costs, subject to reallocation in the award. As to the former, employers must “pay arbitrator’s compensation unless the employee agrees, post dispute, to voluntarily pay a portion of the arbitrator’s compensation.”1
