Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, November 13, 1994 TAG: 9411110031
SECTION: BUSINESS PAGE: F-1 EDITION: METRO
SOURCE: GREG EDWARDS
DATELINE: LENGTH: Long
Most people probably picture them behind the defense table just as they see preachers at the pulpit or doctors in the examining room.
Clinton Morse, a labor and employment law specialist with the Roanoke firm of Woods, Rogers & Hazlegrove, is one lawyer who would like to see his clients spending less time in court and more in alternative venues for dispute resolution. Specifically, Morse proposes that more workplace disputes be heard by arbitrators.
That idea may sound strange, considering that Morse and his legal colleagues stand to make money each time an employment-law case goes to trial.
"For every employment case brought against one of our clients, Woods Rogers can pretty much ring up another $100,000," Morse told participants in the law firm's annual labor and employment-law seminar, held this month at the Roanoke Airport Marriott hotel.
He sought to make a case for why business managers should consider having employment-related disputes heard by arbitrators rather than juries and judges.
Airing employment cases in long, drawn-out court proceedings is inefficient, he explained afterward.
"No one wants to profit from inefficiency," he said.
Morse has the perspective of a lawyer who defends companies from discrimination and other types of employment-law claims. The lawyers for employee plaintiffs, who sometimes win six- and seven-figure jury awards, can see things differently.
At the seminar, he quoted from an article that appeared this year in "Lawyers Weekly," in which the chairman of the National Employment Lawyers Association called arbitration "scary" and "shocking."
The meeting room at the Marriott was packed, but when Morse asked for a show of hands, the only company to indicate it uses arbitration to settle disputes was Morse's own client, Roanoke Gas Co.
When Roanoke Gas introduced a company handbook last year, it included mandatory arbitration of disputes for all nonunion employees. That covers 115 of the company's 175 hourly employees. The 60 union employees at Roanoke Gas have a different provision for arbitration in their contract.
Roanoke Gas wanted the handbook to include the most up-to-date method for dealing with employee disputes and arbitration was it, said company Vice President Rob Glenn. The company's arbitration plan, which applies in cases of suspension or termination, provides for the company to pay reasonable legal expenses for the employee, Glenn said.
The company views arbitration as a quicker way of settling disputes, he said. Roanoke Gas has not had the occasion to use the process yet and hopes it never has to, he said.
Litigation expenses have become one of the major costs of doing business in the United States, and companies need to look for ways to reduce the potential for runaway legal costs and liabilities, Morse said.
The 1991 Civil Rights Act gave a plaintiff in an employment-discrimination case the right to a jury trial and to collect compensatory and punitive damages from a defendant employer. Since then, the number of employment-related lawsuits has exploded, Morse said.
But even before the changes in the civil-rights law, the number of cases brought by workers against employers was growing at a rate far faster than litigation as a whole. The employment cases involve laws that are meant to protect an employee or potential employee from adverse actions on the part of an employer in such areas as equal employment opportunity, age discrimination and discrimination against the disabled.
A study by the Washington, D.C.-based Bureau of National Affairs Inc. shows that the number of employment lawsuits in federal court grew by 430 percent between 1971 and 1991, while all civil lawsuits filed in federal court during the period increased by 110 percent.
The authors of the study estimate that in addition to the federal employment lawsuits, which totaled 22,968 in 1991, another 10,000 wrongful-dismissal suits are being filed by workers against their employers each year in state courts.
On top of that, employers are faced with another 90,000 cases that employees file each year with the Equal Employment Opportunity Commission, which for the most part are dealt with administratively. That number is up from 56,000 annually in 1980.
Arbitration is the most efficient way of handling the cases that have resulted from a growing complexity of federal employment law, Morse said. He pointed out that the federal courts now recognize arbitration as a legitimate way of handling employment-law disputes and the 1991 Civil Rights Act actually encourages the use of alternative ways of settling disputes, including arbitration.
For the employer, mandatory and binding arbitration is quicker and cheaper than jury trials, prevents bad publicity and often results in a fairer outcome for the company, he said. Arbitrators tend not to approve excessive claims against employers because they are dependent on them for repeat business, Morse said.
The downside of arbitration is that it eliminates the possibility of a summary judgment that might be available in court and limits the opportunities for an employer to appeal. It also doesn't prevent lawsuits for failing to hire someone and may not be of benefit to small employers.
Agreements between employers and workers and employers and unions to arbitrate discrimination claims "will provide employers with a prompt, workable and predictable means of resolving employment disputes and shield employers from the massive liability and uncertainty that they otherwise face in jury trials," Morse said.
by CNB