Opposing Excessive Use of Employer Bargaining Power in Mandatory Arbitration Agreements through Collective Employee Actions Academic Article uri icon


  • When you review the modern employment relationship and the role of contract, you have to start with the default position of employment-at-will, which allows an employer, in general, to terminate an employee for good reason, bad reason, or no reason at all. A number of exceptions to the employment-at-will rule exist, including tort and statutory employment discrimination claims that allow employees to seek legal remedies and punitive damage awards from juries. As these exceptions have developed outside of contract law, employers have responded by a major contractual effort to shift these disputes away from the courts and into arbitration. The primary employer methodology for accomplishing this shift has been to require that employees agree, at the time of being hired, to arbitrate any disputes arising out of the employment relationship. In 1991, the Supreme Court held that an employer could compel arbitration of a statutory employment discrimination claim based upon an agreement to arbitrate that occurred as a condition of employment. These one-sided, adhesion agreements to arbitrate future disputes, sometimes referred to as agreements for mandatory arbitration, represent a private contractual response by employers to limit an individual employee's publicly-developed rights and remedies. Sadly, the average individual who recoils at the proposal of such an agreement to arbitrate future disputes with an employer has little bargaining power to actually refuse when the arbitration agreement is offered as a condition of employment. As a result, this individual will not likely have a chance to pursue any publicly-developed rights provided by a statute. In this Article, I focus on how employees can respond and address excessive bargaining power issues when employers require individual employees to agree to arbitrate employment disputes as a condition of employment. My thesis is that individual employees can and should seek self-help through collective action to level the playing field for bargaining about arbitration. Furthermore, I contend that the best collective action would be for unions to play a major role in how individual employee disputes, including the various statutory and tort-based exceptions to the employment-at-will doctrine, are negotiated and resolved in arbitration. Section II of this Article reviews the Supreme Court's analysis of mandatory arbitration agreements involving statutory employment discrimination claims and its lack of concern for bargaining power in enforcing these agreements. Section III addresses the underlying concerns that led employers to excess when seeking mandatory arbitration agreements, and why that response now appears so insidious to many employee advocates. Section IV offers a solution to the dilemma of bargaining power excess engaged in by employers through mandatory arbitration-the use of collective employee activity with the assistance of unions. Finally, this Article concludes that creative uses of unions as assistants to groups of employees can chill employer excess and ultimately level the bargaining playing field with respect to decisions to arbitrate employment disputes.

published proceedings

  • Texas Wesleyan Law Review

author list (cited authors)

  • Green, M. Z

complete list of authors

  • Green, Michael Z

publication date

  • October 2003