Can you explain what “Circuit City” and “Waffle House” are? Most people would describe them as business establishments that one would find in or near a shopping mall. On the other hand, to the individual experienced in the laws of the workplace these are the shorthand names of two U.S. Supreme Court decisions handed down in 2001 and 2002. They both deal with certain aspects of mandatory arbitration agreements covering employment disputes.
In the past several years there has been a growing interest in alternative dispute resolution procedures for employment law claims. Companies, in particular, have looked for ways to reduce their legal costs in defending against a variety of complaints brought by former employees or disgruntled workers. Employers also have been unhappy with the lengthy process of litigation, and the risks of runaway jury awards. One approach that they have been following with greater frequency to deal with these problems is the establishment of an arbitration procedure involving the company and employee that forces both parties to resolve their disputes through binding arbitration rather than in the courts.
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