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Jury waivers: Your new alternative to arbitration agreements?

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in Employment Law,Human Resources

by James J. Rooney, Esq.

Over the past couple of decades, there has been much debate over whether arbitration agreements can successfully prevent employees from asserting discrimination and other employment-related claims in court.

The idea—propounded by professional arbitrators as a surefire way to handle litigation in a faster, more efficient and cheaper manner—has caught on, thanks to several favorable Supreme Court decisions in the last decade. Simply put, arbitration is seen as a risk-limiting tactic because juries are removed from the equation. That means no runaway jury verdicts.

Lost in this debate, however, is a simpler and perhaps more reliable means of managing an employer’s risk: a jury waiver.

What is a jury waiver?

A jury waiver is a contractual provision in which an employee waives the right to a trial by jury in a legal proceeding brought against an employer. Such a provision is most commonly found in employment agreements that are entered into when employees are hired.

However, jury waiver agreements can be signed at other times, such as when an employee obtains a raise or promotion.

Many employers assume that a jury waiver cannot be enforceable. We are, after all, trained from an early age to believe that we have a constitutional right to a trial by jury. In large part, that belief is accurate.

The right to a jury trial is em­­bodied in both the U.S. and New York constitutions. And yet, the case law is generally clear that a jury waiver, if properly written and entered into, can have the effect of surrendering an employee’s right to a jury trial.

Jury waiver or arbitration?

The more pressing question, then, is not whether a jury waiver is valid, but whether employers should take advantage of this opportunity. Is a jury waiver preferable to arbitration?

Both jury waivers and arbitration agreements help avoid the danger and unpredictability of a jury trial, but there are some distinct advantages to jury waivers. Maybe the most obvious advantage is that, by keeping the process in the judicial system, a jury waiver allows the em­­ployer to exercise all of its formal, procedural rights, including the right to:

  • Conduct discovery
  • File a motion asking for the dismissal of the case
  • Pursue a meaningful appeal.

Anyone who has been through litigation knows that these tools can be powerful weapons for a defendant.

Detractors of jury waivers respond by arguing that arbitration is cheaper and less time-consuming. In many instances, they are correct.

However, most lawyers would agree that arbitration has become more protracted and expensive in recent years. Although it may still be a cheaper alternative to judicial litigation, the advantage is not as clear cut as it was in the past. This is in no small part due to the fact that arbitration agreements are often challenged in court.

In fact, litigation over the enforceability of an arbitration agreement can be so costly and time consuming that it often defeats the purpose of arbitration altogether.

Still, employers considering using jury waivers must be aware of the best manner in which to frame such a waiver in order to enhance its chances of being held enforceable.

Courts have made it clear that a jury waiver must be “knowing and voluntary” in order to be enforceable.

Jury waivers done right

As such, a waiver is more likely to withstand challenge if it contains specific references to the statutes for which a jury demand is being waived (e.g., Title VII of the Civil Rights Act of 1964, the ADA, etc.).

On the other hand, if the waiver is buried in a lengthy, complex contract or is being forced upon an unsophisticated employee who is unlikely to appreciate the waiver’s implications, a court will be less inclined to find that the waiver is truly “knowing and voluntary.”

An employer should therefore en­­sure that the agreement is carefully drafted to make clear the nature and scope of the jury waiver.

Ultimately, although often ignored as a possibility, jury waivers are a viable option for many employers. The state and federal courts have upheld their validity. Accordingly, despite all of the attention given to arbitration agreements, many employers would be well advised to carefully consider the advantages of a jury waiver instead.

The first step is a comprehensive evaluation of your situation and any existing arbitration agreements, handbook provisions and other contractual obligations. This is not a do-it-yourself project. Be sure to discuss it with your attorney.

______________________________

Author: James J. Rooney is an attorney in Bond, Schoeneck & King’s Labor and Employment Law Practice, working in the firm’s Buffalo office. Contact him at (716) 566-2859 or jrooney@bsk.com.

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