Employment Law Practice Exam

What is a historical use of arbitration?

1. To mediate workplace disputes without binding decisions

2. To resolve disputes regarding contractual rights

3. As a final resolution process in workplace conflicts

4. To limit employer liabilities in lawsuits

The correct answer is: To resolve disputes regarding contractual rights

The correct answer reflects the traditional role of arbitration as a means to resolve disputes over contractual rights. Historically, arbitration has been utilized to settle disagreements that arise from contracts, allowing parties to avoid lengthy litigation in courts. The process usually involves a neutral third party reviewing the evidence and making a decision, which is often binding. This method provides a streamlined approach to resolving disputes, particularly when parties have predetermined that arbitration will be used in their contracts. While mediation is indeed used for conflicts in workplaces and doesn’t lead to binding resolutions, that is not the essence of arbitration. In the context of workplace conflicts, arbitration does provide a mechanism for final resolutions, but it’s historically linked to contractual rights rather than solely focused on workplace issues. Limiting employer liabilities is more a function of legal strategy and contract terms rather than a historical purpose of arbitration itself. Thus, the long-standing use of arbitration is best captured in its role as a mechanism for resolving disputes regarding contractual rights.