After many years in the works, construction is finally beginning for a new Federal Courthouse in downtown Los Angeles. Presently, there are two buildings that constitute the Central District of California, in downtown Los Angeles. The new courthouse will be even closer to the State Courthouse. In a separate posting, I will give you a complete historic analysis of what was on the site for however many years I can go back as a Los Angeles historian. The point here, however, is before binding arbitration became so prevalent in employment litigation, it was more common for my firm to have employment lawsuits in the Central District of California (Federal Court).
Employment lawsuits in Federal Court, at least in California, are usually the products of large corporations that are not based in California, or under the law are not considered to be a resident of any particular state over another. Once an employment case is filed in State Court using California State employment laws (which are much more favorable than Federal laws for the most part), large employers can remove these lawsuits to Federal Court on the basis of what is called Diversity Jurisdiction. If an individual is a defendant in the lawsuit, diversity jurisdiction does not exist if the individual is a resident of California. The most relevant time that happens in my practice area of employee representation is in the case of sexual harassment when the harasser is being sued individually.
In the last ten years, the trend has been that most large corporations require their employees to agree to arbitrate their cases. This may explain why it seems that far fewer of my cases are in Federal Court than was the case in the 1990s. In terms of binding arbitrations, I recall remarking some years back that approximately 1/3 of the employment cases my firm handled were in binding arbitration.
The trend for employment litigation to be handled in arbitration is on the rise. Due to several recent appellate level cases, and U.S Supreme Court cases, employers have devised a way to get out of class actions; require their employees to arbitrate all disputes. With these new court decisions, employers are more likely than ever to require their employees to arbitrate in hopes that eliminates class actions from being capable of being filed. That precise issue is an issue I am presently involved in and has been fully briefed on a meal and rest break class action I am on.
While many people bark at arbitration, the truth is since we have been called the Employment Lawyers Group in 2008, we have not lost a single binding arbitration. While arbitration awards may not be jackpot winners for employees as sometimes happens with juries only to go through years of appeals, the awards have been well reasoned. At least in our experience, the amounts awarded the clients have been substantial, and on an overall level fair. If you have the right arbitrator, you might get an award that makes a lot more sense than many of the jury verdicts that come out of the courthouses. The downside is the process is not appealable and there are a lot of arbitrators who are retired lawyers and judges. Their attention span may be limited by travel plans, or the decision they made not to work as much when they retired. The criteria for arbitrators keeping up on the law is limited, they do not have the same quality staff a judge would, and their ability to decipher the ever-changing landscape of employment law could be daunting.
If you have any questions about an employment situation whether or not it involves binding arbitration, or Federal Court, give me a call at: