After the Missouri Senate passed a similar bill two weeks ago, the Missouri House is now considering a bill that could expand the use of arbitration in employee disputes with companies. Many Missouri businesses support the out-of-court method of dispute resolution, but employment lawyers and pro-labor groups say it puts workers at a greater disadvantage.

State Rep. Kevin Corlew (R-Kansas City) speaks on the Missouri House floor in February 2017; photo courtesy of Tim Bommel, Missouri House Communications

The bill was heard by the House Special Committee on Litigation Reform this week at the Statehouse in Jefferson City.

Many work-related disputes are already handled out of court through a neutral party, or arbitrator, who helps negotiate a settlement. Some companies make employees sign an arbitration agreement when they are hired, making disputes over wages or harassment less likely to result in a lawsuit. Gov. Eric Greitens (R), who described Missouri’s judicial system as a “hellhole” in his first State of the State address, is expected to sign a bill that would reduce the number of lawsuits filed in the state’s courts.

A bill introduced by State Sen. Gary Romine (R-Farmington) has already passed in the Senate, and its companion legislation is starting its move through the House. The House version, introduced by State Rep. Kevin Corlew (R-Kansas City), would change existing laws on employee arbitration by allowing the arbitrator overseeing the case to make the initial decision of whether or not a dispute is suited for the process. Courts currently have a say if a dispute can go to arbitration.

Corlew is the Missouri House Judiciary Committee Vice Chairman.

Corlew’s bill would further diminish the role of courts in employee dispute resolution by requiring that they be explicitly mentioned in the arbitration agreement to have say in whether or not arbitration can go forward.

“It is meant to be efficient, timely, and cost effective for all parties,” he testified before the House Special Committee on Litigation Reform, arguing that more arbitration would mean a less burdened judicial system. “It is also judicially efficient in that it frees up dockets that would otherwise be filled with more litigation.”

Corlew says most employee-employer arbitrations last only six to eight months, and that making that process more readily available would help both sides of disputes save money.

Several businesses offered brief testimony in favor of Corlew’s arbitration bill at Monday’s hearing. The Kansas City Chamber of Commerce, health information technology supplier Cerner, and several others expressed their support.

Janet Mark, an attorney for Kansas City-based Hallmark, says arbitration is more likely to succeed than litigation and that most employment disputes filed don’t go to trial. Many are settled and only about 6 percent are actually tried through a trial, she said. “And of those only about a third of the plaintiffs prevail.”

She urges passage of Corlew’s bill, saying it would curtail what she calls court activism, anti-business sentiment, and hostility to arbitration.

Employment discrimination lawyer Amy Coopman, head of the National Employment Lawyers Association, calls arbitration a rigged system. “There are great arbitrators,” she told the Litigation Reform Committee, “but it’s human nature for an arbitrator to want to do things in their self interest and meet their bottom line.”

Coopman says companies are more likely to pick arbitrators who rule in their favor in disputes, comparing the employer to a frequent flier on an airline. “They want to make you happy, they want to give you perks so you keep coming back to that airline”. She compares the employee’s relationship to a traveler who rarely flies– less of a priority.

A 2015 study by The Economic Policy Institute, a pro-labor think tank, found that while arbitration takes half as long, employees are nearly 40 percent less likely to win than they are in a state trial court. The use of arbitration in employee disputes has vastly increased in the past 25 years, with the institute describing it as an “epidemic”. In 1991, only 2 percent of corporations surveyed had mandatory arbitration agreements for employees. They estimate that nearly a quarter of employees are subject to mandatory arbitration.

State Reps. Gina Mitten (D-St. Louis) and Mark Ellebracht (D-Liberty) spoke out against looser restrictions on arbitration this week, but were among a vocal minority on the committee. Mitten is the Assistant Minority Floor Leader in the Missouri House, and is the ranking Democrat on the House Special Committee on Litigation Reform.