Originally from Employment Arbitration - 2nd Edition

"Makeshift" Employment Arbitration Agreements

Thomas E. Carbonneau

The decisional law on the validity and enforceability of employment arbitrations is expanding and acquiring greater definition. It is becoming clear, for example, that the agreement to arbitrate workplace disputes is a self-contained, autonomous contract that governs regardless of whether there is an underlying employment contract documenting the basic relationship between the employer and the employee. A federal district court in New York recognized that circumstance when it held that, although an offer of employment in a letter may not constitute a contract of employment, the arbitration clause in that letter could stand as an agreement to arbitrate. Accordingly, an employer and an at-will employee could agree to arbitrate disputes, including statutory discrimination claims, without converting the at-will employee to employee under contract. The arbitral clause, therefore, stands on its own as a contract and does not affect, and is not affected by, the circumstances of employment.

In a number of instances, courts have held that the arbitral clause remains enforceable even though the employment agreement or relationship has expired. It can also have an impact upon related agreements or relationships. Moreover, an arbitral clause can trump the use of established, inside-the-industry arbitration procedures.