Developing Employer-Based Arbitration Programs to Resolve Wrongful Termination Claims

Due to the many benefits that employment arbitration provides, many employers have begun to implement their own arbitration programs to resolve disputes regarding wrongful termination, discrimination and other employment disputes.  Some considerations for establishing a program include:

Scope of Dispute

Employers must indicate in arbitration policies what disputes will be submitted to these programs.  This may include disputes involving lay-offs, termination, discipline or other factors that may result in constructive discharge.  Some programs may include other employment disputes such as the enforcement of non-compete agreements or discrimination claims while others are restricted only to discharge matters.

Mutuality of the Agreement

To be enforceable, the agreement must be mutual.  The employer cannot restrict the employee’s right to litigate in court while keeping this option open to themselves.  There may be some exceptions provided for in the agreement of when court intervention is proper and allowed.

Selection of the Arbitrator

It is important that employers do not appear to have influence over the outcome of arbitration due to a relationship with a particular arbitrator.  Employees should be allowed to help decide which arbitrator to use and be given a diverse list of qualified arbitrators.

Procedural Rules

The arbitration agreement may set out specific rules about how arbitration will proceed, such as providing only basic discovery or requiring the application of the rules of evidence.

Written Decisions

The arbitration agreement should require that the arbitrator draft a written decision when the case is concluded.


The agreement should indicate if arbitration will be binding and final as well as identify the times when the decision may be appealed.