Every day, more companies are placing clauses in their employment contract or employee handbook to prevent litigation in case a dispute arises. Instead, companies prefer – and are requiring the use of – arbitration.
An arbitrator’s decision is considered final, legal and binding. Dr. Stanley Leasure, a business law professor at Missouri State University, is trying to influence how and when attorneys should be able to appeal the decisions.
“Who gets to decide? When are parties bound by an arbitration agreement? What issues are covered by the agreement? These are some of the questions I’m asking,” he said.
What happens when something goes wrong?
“Many big companies want to limit your ability to sue them – of course they do,” Leasure said. “It’s messy and expensive. But more than that, it’s an exhibition that they don’t want.”
When the Federal Arbitration Act passed in 1925, it contained a few circumstances when an arbitrator’s decision could be overturned in court. Since then, more and more people dissatisfied with an arbitrator’s decision appeal to federal court.
“This is where Pandora’s box is really flung open,” Leasure said.
Courts interpret the nuances of those original exceptions differently. And several have expanded the exceptions beyond those in the Federal Arbitration Act.
While the courts have moved to revert to the original exceptions, some of the newer exceptions are still in play. Until all of the additions have been removed, Leasure expects more cases to make their way through the appeals process.