Pub. 1 2011 Issue 2

17 to tell the arbitrator its view of the dispute, and submit evidence including the testimony of witnesses. The arbitrator will study the evidence and make their decision. Any binding arbitration award is legally enforceable by the courts. Binding arbitration vs. court cases Court cases usually are time consuming, disruptive, com- plex and expensive. In many cases, arbitration of employment disputes is relatively inexpensive, fast and simple to use for both sides. Also, courts follow a complex set of formal rules. Arbitra- tors work under the guidance of a code of procedure published by the arbitration organization, a copy of which can usually be obtained by visiting the arbitration administrator’s website. Ar- bitrators often are lawyers, retired judges or other persons skilled in resolving disagreements. Benefits of binding arbitration • Reduced costs – Arbitration is usually much less costly than taking the same dispute to court. Transaction costs are typically higher in litigation – experts, depositions, expenses and general costs are significantly higher in a multi-year lawsuit. In addition, there is no requirement that a lawyer be utilized, which itself can result in significant cost savings. • Privacy – As disputes are resolved outside the court system, the process is private. Binding arbitration typically does not generate the publicity that court cases can. • Fewer delays – The average civil case takes two and one-half years to resolve, while the average binding arbitration case is resolved in less than nine months. The NAF says most binding arbitration cases can be completed within three to six months. • Rational decisions – In binding arbitration, an experienced arbitrator, instead of a jury panel, will resolve the dispute according to substantive law. Best practice guidelines for employment agreements • Decide whether you will implement binding arbitration for current employees and new hires, or for new hires only. If you are considering adopting this for current employees, consult your legal counsel for advice. Courts in several states have ruled that implementation of this on current employees is a reduction in the employment agreement and would require an equitable benefit advancement equal or greater to this reduction. You can avoid this risk by implementing binding arbitration on new hire employees only. • Advise new employees that this is a condition of hire before making an offer for employment. It is best to present this condition during the application or interview part of the hiring process. • Adequately train employees involved in the hiring process on binding arbitration’s benefits and processes. • Develop internal procedures for handling a new hire that is reluctant to sign the agreement. • Update business procedures to ensure that a signed agreement is made a part of an employee’s permanent record, and update internal control procedures to reflect this process. Loss prevention information For questions about this loss prevention topic, contact the Zurich Risk Engineering Department at 800-821-7803. For more information on any of Zurich’s products or services, visit www. zurichna.com/zdu. Q Court cases usually are time consuming, disruptive, complex and expensive. In many cases, arbitration of employment disputes is relatively inexpensive, fast and simple to use for both sides. REACHYOUR TARGET AUDIENCE AFFORDABLY Find out how targeted advertising can produce real, measurable results for your organization. Don F. Brown, Advertising Sales 801.746.4003 | don@spectruminkpublishing.com ADVERTISE AND GET RESULTS