Danny Sikka's Commentary in Hospitality Law "Consider Pros and Cons of Mandatory Arbitration"

Danny Sikka’s commentary on Shelton v. Ritz-Carlton Hotel Co. LLC was published in the August 1, 2008 issue of Hospitality Law.  Danny observes that the Shelton v. Ritz-Carlton Hotel Co. LLC case illustrates the complicated legal and practical issues facing employers who want to implement a mandatory arbitration of employment disputes procedure. He suggests that an employer should consider the advantages and disadvantages associated with mandatory arbitration prior to implementation.

Danny explains, “One of the advantages of arbitration is that it may result in more predictable decisions than when going before a judge or jury.” He also notes reasons why an employer may not want to implement a mandatory arbitration policy. For instance, the possibility of a bad arbitrator, EEOC investigations and lawsuits, and multiple claims resulting in a higher number of partial victories for employees. He concludes, “Mandatory arbitration can be very beneficial to an employer. However, failure to properly implement an arbitration procedure could result in these potential benefits not being realized or, worse yet, being negated by costly legal fees and administrative problems.”