Jury panels in the Los Angeles Superior Court (which is often referred to as “The Bank” by the plaintiffs’ bar) have recently delivered multimillion-dollar verdicts to former-employee plaintiffs.  Many employers doing business in California already have insulated themselves from such disasters by adopting comprehensive arbitration regimes, which would require that such cases be heard by a retired judge or employment lawyer rather than a jury of the employee’s (not the employer’s) peers.

In one recent case involving alleged wrongful termination and racial discrimination, the jury awarded the former employee $16.6 million, which is the largest such verdict in California state history.  The verdict consisted of $373,514 in lost wages; $2.5 million in emotional distress damages; and $13.8 million in punitive damages.  Added to this will be another $1 million or so in prevailing-party attorney’s fees that will go to the former employee’s lawyer.  Another Los Angeles jury recently awarded $15 million to a former employee who claimed he was discriminated against on the basis of a disability.  That verdict consisted of $5 million in lost wages and emotional distress damages and $10 million in punitive damages.

The fact that such monster verdicts are stalking the land pushes up the settlement value of all cases — and the risk of not settling means the employer is subjecting itself to funding the winnings of those who play the California litigation lottery.  The best antidote?  Arbitration agreements.  Although arbitration is hardly a panacea and carries with it a number of significant limitations and disadvantages, the time has come for employers to shut down this game by choosing arbitration once and for all.

The top three reasons for adopting an employment arbitration agreement today are:

  1. Arbitrators generally provide reasonable awards that fairly compensate an employee who has actually suffered some form of discrimination, harassment or other wrongful treatment.  Unlike a jury, however, they generally do not get carried away and award gargantuan amounts of money for alleged emotional distress and punitive damages — both of which are basically unlimited under California law.
  2. The mere existence of an arbitration agreement functions as a form of “Wolfsbane” that wards off the most aggressive plaintiffs’ lawyers.  Once they find out their client signed an arbitration agreement, they know they have no chance of ever bamboozling a gullible jury into awarding them millions of dollars and they will usually drop the case or settle it on the cheap.
  3. The arbitration agreement can and should include a class-action waiver provision.  This means that any employee who signs such an agreement agrees not to lead or participate in a class action against the employer.  These provisions are perfectly legal (even in employee-friendly California) and alone justify the adoption of such an agreement.

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Photo of Tony Oncidi Tony Oncidi

Anthony J. Oncidi is the co-chair of the Labor & Employment Law Department and heads the West Coast Labor & Employment group in the firm’s Los Angeles office.

Tony represents employers and management in all aspects of labor relations and employment law, including…

Anthony J. Oncidi is the co-chair of the Labor & Employment Law Department and heads the West Coast Labor & Employment group in the firm’s Los Angeles office.

Tony represents employers and management in all aspects of labor relations and employment law, including litigation and preventive counseling, wage and hour matters, including class actions, wrongful termination, employee discipline, Title VII and the California Fair Employment and Housing Act, executive employment contract disputes, sexual harassment training and investigations, workplace violence, drug testing and privacy issues, Sarbanes-Oxley claims and employee raiding and trade secret protection. A substantial portion of Tony’s practice involves the defense of employers in large class actions, employment discrimination, harassment and wrongful termination litigation in state and federal court as well as arbitration proceedings, including FINRA matters.

Tony is recognized as a leading lawyer by such highly respected publications and organizations as the Los Angeles Daily JournalThe Hollywood Reporter, and Chambers USA, which gives him the highest possible rating (“Band 1”) for Labor & Employment.  According to Chambers USA, clients say Tony is “brilliant at what he does… He is even keeled, has a high emotional IQ, is a great legal writer and orator, and never gives up.” Other clients report:  “Tony has an outstanding reputation” and he is “smart, cost effective and appropriately aggressive.” Tony is hailed as “outstanding,” particularly for his “ability to merge top-shelf lawyerly advice with pragmatic business acumen.” He is highly respected in the industry, with other commentators lauding him as a “phenomenal strategist” and “one of the top employment litigators in the country.”

“Tony is the author of the treatise titled Employment Discrimination Depositions (Juris Pub’g 2020; www.jurispub.com), co-author of Proskauer on Privacy (PLI 2020), and, since 1990, has been a regular columnist for the official publication of the Labor and Employment Law Section of the State Bar of California and the Los Angeles Daily Journal.

Tony has been a featured guest on Fox 11 News and CBS News in Los Angeles. He has been interviewed and quoted by leading national media outlets such as The National Law JournalBloomberg News, The New York Times, and Newsweek and Time magazines. Tony is a frequent speaker on employment law topics for large and small groups of employers and their counsel, including the Society for Human Resource Management (“SHRM”), PIHRA, the National CLE Conference, National Business Institute, the Employment Round Table of Southern California (Board Member), the Council on Education in Management, the Institute for Corporate Counsel, the State Bar of California, the California Continuing Education of the Bar Program and the Los Angeles and Beverly Hills Bar Associations. He has testified as an expert witness regarding wage and hour issues as well as the California Fair Employment and Housing Act and has served as a faculty member of the National Employment Law Institute. He has served as an arbitrator in an employment discrimination matter.

Tony is an appointed Hearing Examiner for the Los Angeles Police Commission Board of Rights and has served as an Adjunct Professor of Law and a guest lecturer at USC Law School and a guest lecturer at UCLA Law School.