David Garland Quoted in "Backlash Has Some Employers Rethinking Forced Arbitration"

The U.S. Supreme Court’s blockbuster Epic Systems decision gave businesses a green light to make employees sign away their right to bring class actions, but new legislation aimed at giving workers their day in court underscores a backlash against mandatory arbitration that’s causing employers to think twice, experts say.

Many employers rushed to adopt arbitration agreements last year following the high court’s proclamation, in Epic Systems Corp. v. Lewis, that companies can make workers bring solo arbitration claims rather than class or collective employment suits without violating the National Labor Relations Act.

But worker pushback is giving some employers pause, and Thursday’s broad proposal from Democratic lawmakers to do away with mandatory arbitration of employment and other claims adds yet another wrinkle to the analysis. …

Arbitration agreements can differ in their mechanics and scope, but they generally make workers lodge claims in arbitration rather than court. Many also include class action waivers, which make workers argue their claims individually rather than in a group.

Employers adopt arbitration agreements for many reasons, among them that arbitration is typically faster than litigation, said David Garland, chair of management-side firm Epstein Becker Green’s employment steering committee. Employers’ costs and legal fees are often lower in arbitration than in court as well. But arbitration has drawbacks as a means of resolving disputes: Although losing parties can appeal to a judge, they rarely succeed, and summary judgment rulings are harder to win, Garland said.

“There always have been pros and cons,” Garland said. …

Even if the pros of arbitration agreements haven’t changed for employers, these headwinds play into the analysis, Epstein Becker Green’s Garland said.

“There are employee relations issues, there are public relations issues,” he said. “We’re seeing more employee activism in these areas, so all of these factors go into a rather complex calculus in making these decisions.” …

Garland noted the last two Democratic administrations passed labor reforms early on, potentially setting up a hat-trick should the stars align in 2021.

But “in terms of where we end up post-Epic, and how it’ll evolve … this may be mixing my metaphors up, but the jury is still out,” Garland said.