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Cost-sharing can cost you in arbitration agreements

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in Discrimination and Harassment,Human Resources

To get a job as an airport security agent, Damiana Perez had to agree to arbitrate all employment disputes. The agreement required her and the company to split the costs of filing for arbitration.

When Perez filed suit claiming gender discrimination under Title VII, a federal appeals court let her case go to trial, refusing to uphold the arbitration pact. Why? Title VII allows prevailing parties to recover attorney fees and other ?costs, so any agreement barring that is illegal, the court said. (Perez v. Globe Airport Security Services Inc., No. 00-13489, 11th Cir., 2001)

Advice: The U.S. Supreme Court recently gave employers a green light to arbitrate employment claims, but you still have to be smart in how you craft the agreement. The more an employee has to pay for arbitration, the less likely courts are to uphold your arbitration clause. One measuring stick: Judges don't look favorably on workers paying more to arbitrate than they'd pay to take the case to court.

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