Seeba & Associates, Inc. CPAs 1825 Hamilton Ave, San Jose, CA 95125 408-559-8410 www.seebacpa.

com

Arbitration Enforced Despite Employee Reluctance

Many faith-based organizations have policies in place that require the use of an arbitrator in lieu of the court system for settling disputes between employers and employees. And often as not, employees are required to agree to such arbitration before being eligible for hire. Over the last decade the Courts have upheld the reliability of arbitration agreements between employers and employees in cases involving discrimination claims. The first involved the case of a human resources director who signed a document containing a mandatory arbitration clause, then later filed an EEOC complaint against her company for gender and age discrimination. The company responded with a federal lawsuit alleging conspiracy to injure its reputation. The company also argued the employees complaints were barred because she did not first enter arbitration. In overruling a lower court, the 4th Circuit noted that both parties were required to submit their claims to arbitration first. (Microstrategy Inc, v. Lauricia, No. 00-2297 (4th Cir, 9/27/01) A second case involved a manager at an Olive Garden Restaurant who attended a mandatory weekly briefing where the restaurants new dispute resolution procedure (DRP) was briefly announced. He signed an attendance sheet at the meeting, which stated that he was present and received the DRP information. Three months later, he submitted claims of racial and religious discrimination to be resolved under the DRP program. When no settlement was reached, he filed a federal lawsuit, and claimed hes never consented to the DRP agreement. But the court remanded the case and compelled arbitration because it found a valid arbitration agreement existed from the time of the weekly briefing. The managers continued employment after the briefing and the signing of the attendance sheet also, in the Courts opinion, constituted his agreement to be bound by arbitration. Finally, the Court reasoned that the fact that he brought his initial claim under the DRP program also suggested he had ample understanding and knowledge of the agreement. (Hightower v. GRMI, Inc No. 01-1302 (4th Circuit 11/14/01) Both of these rulings suggest that the use of an arbitration clause in employment contracts can serve an extremely useful purpose for a ministry by allowing for the resolution of disputes without having to appeal to the court system, a process with often takes a significant amount of time and expense. In addition, the dispute resolution process, if handled sensitively and biblically, can provide a means for not only settling the dispute but for reconciliation of the parties as well.

Seeba & Associates, Inc. CPAs ~ 1825 Hamilton Ave, San Jose, CA 95125 ~ 408-559-8410 ~ June, 2012