Arbitration Programs

Have an arbitration program at your workplace?

In Davis v. O’Melveny and Meyers, 9th Cir., No. 04-56039 (05.14.07), the 9th Circuit Court of Appeals ruled a law firm’s mandatory dispute resolution program for issues relating to employment with the organization. While the program included options for mediation and mandatory final and binding arbitration on claims against the firm, it exempted workers’ compensation and unemployment benefits as well as confidentiality issues. Dispute disclosure to third parties were written into the program as prohibited.

An employee for the law firm filed a lawsuit detailing the firm’s failure to pay her for overtime and work performed during meal and breaks periods. Because of the binding arbitration agreement signed by the employee, the courts ordered the matter to arbitration. On appeal, it was determined the mandatory dispute resolution program was “procedurally and substantively unconscionable” and therefore unenforceable.