Wage Law

The following statement was released today by the arbitration/mediation firm JAMS, the nation's largest provider of alternative dispute resolution services:

In November of 2004, JAMS announced a policy regarding the administration of arbitrations where there is a contract that contains a clause prohibiting consumers from joining class action arbitrations.

JAMS is withdrawing its policy for the following reasons:

The initial statement of the policy suggested to some that JAMS had deviated from its core value of neutrality. We want to reaffirm to all of our constituencies that we have a fundamental responsibility and commitment to absolute neutrality and the highest ethical and professional standards. Recent court decisions on the validity of class action preclusion clauses have varied by jurisdiction. In this legal environment, our attempt, as a national ADR provider, to bring uniformity to the administration of class wide arbitrations stemming from these clauses has created concern and confusion about how the policy would be applied. Accordingly, we are retracting the previously announced policy and reaffirm that JAMS and its arbitrators will always apply the law on a case by case basis in each jurisdiction.

There you have it: proof that JAMS, like AAA and every other arbitration service provider is concerned primarily about meeting the goals of its corporate repeat customers. Remember that the next time some company asks you to sign an arbitration agreement. They want you to sign it because they are convinced -- reasonably so -- that they will get a better deal from a repeat-business seeking ADR firm than they will get from a real judge or jury.

If you are an employee who is considering filing an arbitration claim against your employer, don't just assume that arbitration is your only option. There is little doubt that, if arbitration is not your only option, it is your worst option. That is why we almost always challenge the enforceability of arbitration agreements, often with great success. Like many other wage and hour law practitioners in California, we continue to closely follow the development of the law regarding mandatory arbitration.