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Leslie Bonacum
Neil Allen

Arbitrate, Don’t Litigate, Supreme Court Tells Employees

(RIVERWOODS, ILL., March 22, 2001) – If you have a beef with your boss, you may have to forget about taking it to court. Instead, like a baseball player, you may have to hope that an arbitrator sees things your way, according to CCH INCORPORATED (CCH), a leading provider of employment law and human resources information and software.

On Wednesday, the U.S. Supreme Court closed the door on attempts by employees to avoid mandatory arbitration of employment disputes, holding that a possible exemption from arbitration for "employment contracts" found in a 1925 federal law - the Federal Arbitration Act - was limited to contracts of transportation workers.

The Court ruled in a 5-4 decision that a gay former employee who alleged discrimination by his employer was required to arbitrate his claim under an arbitration agreement the employee signed as a condition of being hired

Agreements such as the one the employee signed prevent employees from taking their employment disputes to either federal or state courts and instead require employees to utilize alternative dispute resolution procedures, such as arbitration, created by their employers.

Employers Prefer Arbitration

"Arbitration is preferred by many employers because it lessens the costs and uncertainty associated with court litigation and can be faster and more private as well," noted Deborah Hammonds, JD, labor and employment law analyst with CCH. Unlike court proceedings, the findings of an arbitrator are not normally a matter of public record.

The Supreme Court's action overturns a decision by the Ninth Circuit Court of Appeals, which was the only federal appeals court that refused to enforce arbitration agreements in employment contracts under the FAA.

"There has been a trend toward writing mandatory arbitration into individual employment contracts and employee handbooks, and it’s likely that trend will pick up steam now that the Supreme Court has spoken," Hammonds said.


CCH INCORPORATED, headquartered in Riverwoods, Ill., was founded in 1913 and has served four generations of business professionals and their clients. The company produces more than 700 electronic and print products for the tax, legal, securities, human resources, health care and small business markets. CCH is a wholly owned subsidiary of Wolters Kluwer North America. The CCH web site can be accessed at The CCH Human Resources Group site can be accessed at

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