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Thursday, October 24, 2013

Time to Seriously Consider Dispute Resolution Program

By: Tommy Eden


Three Technicians working for DIRECTV each signed an arbitration agreement requiring that “all claims or controversies . . . past, present or future, arising out of an employee’s employment or termination be submitted to binding arbitration, including claims for wages or other compensation due . . . and claims for violation of any federal, state, or other governmental law, statute, regulation, or ordinance.”

In November 2011, the Technicians filed a demand for collective or class arbitration alleging that DIRECTV failed to pay them overtime wages in violation of the Fair Labor Standards Act (FLSA).

The Technicians sought to bring their case on behalf of themselves and all other similarly situated employees. The arbitrator agreed and issued an order finding their arbitration agreements provided for collective arbitration. Not liking the result, DIRECTV filed a petition in the district court seeking to vacate the arbitrator’s award and won. The District Court Judge ruled that the arbitrator had exceed her authority and was to hear the FLSA claims individually and not collectively.

Reversing the District Court Judge earlier this week, the 11th Circuit Court of Appeals found in favor of the Arbitrator’s authority to hear the collective action noting “the agreements were worded broadly, encompassing all past, present, and future claims or controversies relating to wages and compensation. According to the arbitrator, the plain language of the agreements explicitly allowed the Technicians to assert their rights on a collective basis.” The U.S. Supreme Court's ruling in Oxford Health Plans LLC v. Sutter early this year greatly expanded arbitration as a means of resolution of a broad range of employment disputes. The case is DIRECTV LLC v. John Arndt et al

Common Sense Counsel: Now is the time to consider the benefits of a well designed dispute resolution program. Such a program increases the prospects that concerns will be resolved before they ripen into actual EEOC Charges, DOL Investigations, Lawsuits, you name your worst employment nightmare. In light of the emerging case law favoring alternatives to court litigation, now is a good time to consider options for designing an employee dispute resolution program and the potential business advantages - not the least of which is not having to spend a sunny day locked in a windowless room with a plaintiff’s attorney with an attitude.

The best programs have the following:
1) an internal complaint process with a promise of no retaliation;
2) a toll free hot line for multiple location employers;
3) handbook provisions giving employee two channels to make their complaint and fair investigation process; 4) well drafted and broadly worded arbitration provision that will pass court scrutiny;
5) training for all employees on the process;
6) private arbitration panel of former local judges and mostly importantly;
7) a Human Resource professional with a listening ear and risk reduction mindset.

Tommy Eden is a partner working out of the Constangy, Brooks & Smith, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com