Labor & Employment Law Daily Wrap Up, NAA CORNER—Be careful what you wish for: mandatory arbitration and class action waivers, (Nov 18, 2025)

By James A. Brown, NAA Member

The panel did a terrific job addressing a topic that is quickly transforming the practice of employment arbitration and reviving an old adage: “Be careful what you wish for.”

While the recent “Mandatory Arbitration and Class Action Waivers: Heaven or Hell” program at the 48th Annual National Academy of Arbitrators meeting never actually addressed the theological question it teased, the presentation offered useful information on the controversial topics of mandatory arbitration and class action waivers. Moderated by NAA member Mark L. Irvings, the panel included employer-side attorney Donald W. Schroeder, and plaintiff-side attorney Thomas Fowler.

Schroeder proclaimed that mandatory arbitration clauses represent the new reality in employment law and that such clauses will appear in employment agreements whenever desired by employers. A candid discussion ensued about whether mandatory arbitration is indeed a panacea for employers who routinely seek the confidentiality that arbitration offers. With this in mind, Schroeder stated that he challenges his clients by asking if they truly understand the effect such clauses have in their company’s employment agreements. Addressing the significant cost of arbitration, Moderator Irvings inquired: “Can mandatory arbitration provisions be limited to certain executives rather than being applied company-wide?” In response, Schroeder acknowledged the benefit of using mandatory arbitration clauses solely for senior executives rather than the entire workforce.

Those in attendance were also reminded that mandatory arbitration does not mean that there will never be court proceedings. In particular, motions to compel arbitration were cited. Fowler described how some plaintiffs, who are resigned to arbitration, may actually seek to compel arbitration when an employer fails to remit the fee to initiate the arbitration. When an employer files the motion, Fowler explained that he often consents to arbitrate, especially when the “unconscionability” provisions that stayed arbitration have been cured. While stating that mandatory arbitration is a “distortion of how the legal system should work for employees,” Fowler acknowledged that defeating an employer’s motion to compel may only produce a pyrrhic victory where years of appeals cause unwanted delays.

The panel also addressed class action waivers. First, the panel highlighted the enormous cost to employers of arbitrating hundreds if not thousands of related cases that must be separately filed because of class action waivers. Next, the panel discussed the use of cost-saving efficiencies at arbitration such as using template scheduling orders and sharing discovery (i.e., documents, interrogatory responses, deposition transcripts). Such efficiencies can also ease the burden on plaintiffs’ counsel who must represent a multitude of clients. Of note, Fowler observed that some employers are willing to waive confidentiality clauses in order to share discovery across cases. The panel acknowledged that the cost of mass arbitrations may bring the employer to the bargaining table to negotiate a global settlement. Even when claimants do not win each case in a mass arbitration, Fowler noted that the “staggering” cost of arbitrating the claims may force the employer to “cry uncle.”

One potential efficiency—the use of video-recorded deposition testimony at hearings across many cases—was the subject of some disagreement. While Schroeder cited the utility of video recorded deposition testimony for use in related cases, Fowler asserted that a claimant has the right to call witnesses to appear in person at hearings (or at least virtually on Zoom). Fowler maintained that such video recorded testimony is inadequate when used across cases because individual claims, while related, have their own particularities. He added that vacatur is an actual possibility when a party is not permitted to introduce “live” evidence at a hearing.

NAA member Ira Cure raised the prospect of using a master arbitrator who can set discovery schedules, help draft Electronically Stored Information agreements, and ultimately resolve discovery disputes across many cases. While Fowler acknowledged the usefulness of having one arbitrator “who can see the grand picture,” he cautioned that the use of such a master arbitrator may be precluded by an arbitration agreement or an arbitration tribunal’s rules.

As for how a plaintiff’s attorney comes to represent a large group of claimants at arbitration, Fowler explained that a plaintiff’s attorney can seek to conditionally certify a collective or class action in court with a client who did not sign an arbitration agreement or who opted out of arbitration. Once the collective or class action is certified in court, those class members with valid arbitration agreements will then appear at arbitration in their individual cases with their class counsel. Also, the panel observed that if the parties agree to a class action at arbitration, the arbitrator may also certify the class.

The prospect of multiple related cases producing varying outcomes at arbitration was also examined. Looking at the upside, Fowler noted that if you lose before one arbitrator, you may prevail before another. He also cited an advantage when an employer “cuts off its nose to spite its face” by failing to cite favorable arbitration decisions due to confidentiality clauses.

Finally, the panel addressed issue preclusion as it relates to mass arbitrations, and noted some of the obstacles. First, the panel observed that some arbitrators insist that they are not bound by the awards of other arbitrators (and do not want to see those other awards). Also, confidentiality clauses can impede reliance on other arbitration awards. NAA member Barry Winograd addressed the effect of confidentiality clauses by suggesting that an arbitrator could “so order” a claimant’s subpoena directing the employer to produce a favorable arbitration award from a related proceeding. In so doing, the arbitrator’s order would satisfy the contractual clause which permits the disclosing of confidential information when such disclosure is “required by law.” When Schroeder suggested a simpler scenario based on his belief that arbitrators readily admit all evidence, his comment elicited gasps from a disbelieving audience.

In sum, the panel did a terrific job addressing a topic that is quickly transforming the practice of employment arbitration and reviving an old adage: “Be careful what you wish for.”

About the author: James A. Brown has been involved with labor-management issues for more than 30 years and has served as a full-time arbitrator and mediator since 2011.

Companies: National Academy of Arbitrators

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