Arbitration Isn’t Always Good for Employers

arbitration Alabama Employment Law
In employment cases, arbitrators frequently enter decisions that are not employer-friendly.

Business owners frequently think that arbitration agreements are good for business.  That belief is fostered by pro-business organizations like the U.S. Chamber of Commerce, which actually advocates for arbitration of employment disputes here:  Protect Employment Arbitration Agreements

Certainly, in some circumstances, arbitration agreements are good things.  They can offset difficult venues, or employee-friendly judges.  But, in life, there is a cost that comes with almost every benefit.  In my experience, employment law arbitrators tend to “split the baby” and enter decisions under which nobody obtains a complete “victory.”  For example, the arbitrator might reverse a termination decision and impose a ten-day suspension instead.   In some cases, the arbitrator doesn’t even compromise, and instead flat-out reverses an employer’s reasonable termination decision.

That’s what happened recently in Peco Foods, Inc. v. Retail Wholesale and Dep’t Store Union Mid-South Council, No. 17-13269, 2018 WL 1324860 (11th Cir. Mar. 15, 2018). In Peco Foods, a supervisor reminded employees during a safety meeting that throwing ice was prohibited during work hours.  In response, Larry Richardson said:  “I don’t throw ice, I throw lead.”  Richardson’s employer interpreted that statement as a threat of gun violence and terminated his employment.  Richardson’s union filed a grievance challenging the termination, and an arbitrator reversed the decision — finding that the statement was not a threat.

Richardson’s employer appealed the arbitration decision to federal court.  But, courts are extremely reluctant to overturn arbitration decision.  Nevertheless, the employer argued that threats of workplace violence are so serious that the courts should reinstate the termination as a matter of public policy.  The Eleventh Circuit Court of Appeals rejected that argument, primarily because there were factual disputes over whether Richardson’s statement was actually a threat.

Employers with unionized facilities frequently can’t avoid arbitration agreements.  But, other employers should think carefully and consult with counsel before embracing arbitration of employment-related disputes.