4 steps to making arbitration policy valid

Recent healthcare decisions should compel healthcare risk managers to reconsider their hiring process and company policies.

There are four issues employers should examine and change if necessary, says Elliot Zemel, JD, an associate at the law firm of Fenton Nelson in Los Angeles, which advises healthcare facilities on regulatory compliance requirements:

1. Employers must allow sufficient time for the employee to review and inquire about an agreement that contains an arbitration provision. They should tell the employee to take it home for the night and mull over the terms.

2. The agreement must be as fair to the employee as possible. For example, the arbitrator must be neutral and separate from the company; the arbitration agreement should not limit the employee's abilities to conduct discovery of facts and evidence; it should require a written decision so that it may be reviewed by a court; it should not require the employee to pay costs or fees not normally incurred if litigated in court.

3. Arbitration provisions should be explicit and impose the same rules upon the employer as they do on the employee. The courts are likelier to invalidate agreements that are one-sided in their requirements for the employee, limiting a fair chance for employees to vindicate their rights while affording wide latitude to the employer.

4. When using of American Arbitration Association (AAA) or any other method of arbitration, the related rules must be provided to the employee with the employee handbook. This provision has never been a requirement but is arising because many employees are claiming unfamiliarity with the system of arbitration being imposed upon them. By giving employees the rules at the beginning of employment the employer ensures that, should arbitration be necessary, the employee understands what his rights are from the beginning.