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Electric City, a discount retailer with over 500 employees, includes a clause in its employment application stating that all future employment disputes will be resolved through binding arbitration. This clause most likely:

a) will be considered valid by federal courts.
b) will be unenforceable in federal courts.
c) will result in employees having to mediate their employment-related claims against Electric City.
d) will require an employee to mediate employment-related disputes.

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Answer (a) is incorrect.

Although (a) has some truth to it, it is not the best answer. Let's look at the definitions for arbitration and binding arbitration. Arbitration: any of the forms of dispute resolution involving a mutually acceptable neutral third party making a decision on the merits of the case, after an informal hearing which usually includes the presentation of evidence and oral argument. The process has four main variations (creating numerous permutations):
· binding or non binding
· voluntary or compulsory
· private, statute authorized, court-annexed (alternatively termed court-connected)
. one arbitrator or a panel

For example, in Ontario, all arbitrations, whether private, court-annexed or ...

Solution Summary

This solution provides the best response to one multiple choice question on employment law, including a rationale for the best answer.

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