Mediation and arbitration are often referred to as alternative dispute resolution. But here is an arbitration case that could be called alternative dispute aggravation. It should be filed under “Be careful what you wish for; you may get it.” A company hired a female lawyer as its in-house counsel. When she complained that she was being paid less than a male subordinate, in violation of the Equal Pay Act and Title VII of the Civil Rights Act, the company fired her. The parties agreed to binding arbitration. The arbitrators awarded the lawyer $1.7 million and ordered reinstatement, despite the lawyer’s admission that she did not want to be reinstated. The employer appealed, but the trial court and court of appeals affirmed. The case is now on appeal to the Wisconsin Supreme Court. The employer is arguing that the award exceeds the arbitrators’ authority under the parties’ agreement to arbitrate, and it violates the company’s state constitutional right to be represented by a lawyer of its own choosing.
Regardless of how the Wisconsin Supreme Court decides this case, someone should ask why these parties chose binding arbitration? One of my earliest posts is titled “To Mediate or to arbitrate?” I suggested that arbitration is a win-lose proposition while mediation can lead to a win-win solution. In this case, arbitration might result in a lose-lose proposition. If the award is upheld and the employer allows the lawyer to come back to work, but the lawyer refuses to do so, must she give up the monetary award as well? Both parties made it abundantly clear that they don’t like each other. Will the Court really give them the benefit of their bargain by enforcing a shotgun wedding? In any event, this arbitration has not proven to be an economical and confidential alternative to litigation. The parties arbitrated and are now engaged in very public litigation. Was there no mediator available to save these people from themselves?