Loose Lips Sink Ships: Mandatory Confidential Arbitration of Employment Disputes as a Reputational Risk Management Tool

Abstract

Forced arbitration of employment disputes has been heavily criticized for various reasons, but one of its particularly useful applications should not be overlooked: assuming that confidentiality provisions are properly set in place, it can be a powerful safeguard from the reputational damage arising out of employment disputes. For instance, not only would employers benefit from keeping potential fall-outs with their employees away from the public eye, thus protecting the "good employer" image; the employees, too, would benefit from not having their potential transgressions on a public record. In a world where reputation is everything, that additional layer of protection might just be what it takes to make sure that what happens inside the corporate walls, stays inside the corporate walls-for the sake of reputation of both employers and employees alike. This article analyzes the public policy implications of such practice, as well as its legal and practical limitations.