Employment Arbitration and Voluntary Consent

Abstract

The boom in non-union employment arbitration has caused great concern about protecting employees' access to courts. Virtually every commentator agrees that employment disputes should be litigated, rather than arbitrated, unless the employee has voluntarily consented to arbitration. While courts and commentators agree that an employee's voluntary consent is a prerequisite to employment arbitration, they do not agree on what constitutes voluntary consent. This article proposes a method of determining what constitutes voluntary consent to employment arbitration. The method proposed is simply application of ordinary contract law doctrines. The article develops the theoretical underpinnings of the contractual approach to arbitration and, contrary to most commentators, advocates that approach. The article argues for the repeal of the one major legal doctrine inconsistent with the contractual approach, the separability doctrine of Prima Paint Corp. v. Flood and Conklin Manufacturing Co. Most non-union employment arbitration cases have arisen out of the securities industry. The article analyzes the securities laws in some detail to show that issues of voluntary consent are substantially different for employees of that industry as contrasted with other employees. Securities employment arbitration arises, not out of a process of private contracting, but out of a governmental occupational licensing requirement. The article concludes with a call for repeal of this requirement.