McNamee Hosea News & Press


Arbitration Can be an Employment Dispute Resolution Tool

Arbitration is one way that employers may choose to resolve employment disputes. The alternative dispute procedure is essentially a creature of contract law. By contract, the parties appoint a third-party to listen to their case and issue a decision, as the arbitrator. That third party acts like a judge, without the pomp and circumstance.

For example, the parties can mutually determine the procedures governing the arbitration proceeding. In many instances, parties agree to a more relaxed approach to evidentiary rules, allowing hearsay and other evidence to be presented, and trusting that the arbitrator will give each evidentiary submission its proper weight and consideration.

Many employers plan for this contingency by including arbitration clauses in their employment contracts. Instead of the more protracted schedule -- and expense -- of a court trial, an arbitration proceeding can result in a swift decision. The outcome can also be confidential, if the parties choose. However, one recent arbitration decision received media coverage because it involves the hot topic of non-compete agreements.

In the case, a management company claimed that a doctor had violated the non-compete clause of his employment agreement by accepting another job at a nearby public hospital. The parties submitted to arbitration, and the arbitrator ultimately determined that the clause was contrary to public policy. T The management company’s parent corporation requires non-compete agreements from all of the 2,100 doctors it represents. Notably, however, the company acknowledged to investors in a 2012 filing with the U.S. Securities and Exchange Commission that the agreements might be unenforceable.

Source:, “Calif. hospital skirts non-compete rule, hires neonatologist,” Joe Carlson