What is arbitration?

Arbitration is the most common method of Alternative Dispute Resolution (ADR). ADR refers to all methods of resolving disputes outside the court system. ADR is intended to avoid the formalities, delay and expense of ordinary litigation. Under arbitration, the parties to a dispute agree to submit the dispute for resolution to an independent third party or parties. Both sides have the opportunity to present their side of the dispute for consideration by the arbitrator(s). The decision of the arbitrator can be either binding or nonbinding, depending upon the prior agreement of the disputing parties. The American Arbitration Association offers arbitration services and is frequently named in agreements as the arbitrators for any disputes.

What is the difference between arbitration and mediation?

Mediation is another common form of ADR and is less formal that arbitration. Mediation involves a third party mediator whose role is to bring opposing parties together in an attempt to work out a settlement or agreement. The mediator attempts to persuade the disputing parties to adjust or settle their dispute.

Can the University agree to binding arbitration?

No. The General Assembly has never passed legislation authorizing employees of the Commonwealth of Virginia to agree to submit disputes to arbitration. The Virginia Supreme Court has determined that any contract that agrees to submit disputes to abitration would be invalid as to the arbitration of disputes clause, unless such clause was first approved by the General Assembly. Therefore, no officer or agent of the  Commonwealth has authority to enter into these clauses.   This position is based on the court case, Deal vs Commonwealth of Virginia. In this case, the court held that the Commonwealth is not a person or party within the contemplation of the arbitration statues, and that its agents have no authority to bind it to an arbitration agreement. 

Do not agree to any clause requiring the University to submit disputes to binding arbitration to any arbitration board, commission, panel or other entity associated with ADR.

There is no room for negotiation in regard to binding arbitration. However, we can agree to non-binding arbitration or to a third party mediator with the place of mediation being Blacksburg. Do not agree to travel to the sponsor’s location unless they agree to pay travel expenses, because several people may have to participate. Please keep in mind that arbitration is typically presented as binding. Mediation is not. Do not offer mediation unless the company will not agree to anything else.

Binding Arbitration
The General Assembly has never passed legislation authorizing employees of the Commonwealth of Virginia to agree to submit disputes to arbitration. The Virginia Supreme Court has determined that any contract that agrees to submit disputes to abitration would be invalid as to the arbitration of disputes clause, unless such clause was first approved by the General Assembly.

Last update: September 24, 2002