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PROMPT AND FAIR:

Employer-mandated Arbitration May Be Best for Resolving Employment Discrimination Claims

David Sherwyn, J.D.

While most employee advocates argue that the federal or state court is the best venue for victims of employment discrimination, an analysis by Cornell Professor David Sherwyn, J.D. finds that arbitration may be a better method to resolve discrimination claims for both employees and employers. The new report, “Mandatory Arbitration: Why Alternative Dispute Resolution May Be the Most Equitable Way to Resolve Discrimination Claims,” is available at no charge from the Cornell Center for Hospitality Research (CHR), at http://www.hotelschool.cornell.edu/research/chr/pubs/reports/.

“Before anyone goes to an arbitrator or to a judge, the parties should attempt to work out their own solution to discrimination claims,” said Sherwyn, who is an associate professor of law at the Cornell School of Hotel Administration. “When agreement cannot be reached, however, I’ve found that arbitration seems to work better than litigation for both employees and employers. I say this partly because low-paid employees, who might have a claim for a relatively small amount of back pay, have a difficult time getting their day in court, due to the expense of litigation. On the other side, employers are forced to settle meritless cases because the cost of litigation defense is so high. Not only is arbitration less expensive for both parties, it is much faster than going to court."

In response to a perceived increase in litigation, the number of employers that require employees to agree to mandatory arbitration of disputes as a condition of employment has increased in recent years. Critics of mandatory arbitration argue that arbitration works to the disadvantage of employees.

“While it’s difficult to make a direct comparison between cases that go through arbitration and those that end up in court, my analysis found no support for the idea that arbitration necessarily favors one side or the other,” Sherwyn said. The report analyzes studies by several researchers, none of whom found that arbitrators were biased in favor of employers.

Sherwyn’s report presents a case study of a large employer that implemented a program of alternative dispute resolution. Even as the company expanded rapidly and dealt with an increasing number of complaints, the number of claims that went to arbitration or to court was under 10 percent—compared with 26 percent of those handled by the Equal Employment Opportunity Commission. More important to both employees and the company’s managers, the average length of time to resolve a discrimination claim for this company was under two weeks, compared to over one year for the typical EEOC discrimination claim.

All CHR Reports and Tools are available from the Center's web site, www.chr.cornell.edu.

Marketing Roundtable Examines Integrating Technology With Service

Leading hospitality marketing executives and marketing professors at the Cornell Hotel School's second annual Hospitality Marketing Roundtable recently examined how to use technology to improve service and how strategic alliances can boost a hotel brand.

In one session, led by Professor Lisa Klein Pearo, D.B.A. participants addressed the impact of self-service technologies on guest satisfaction. Attendees agreed that one key to successful integration of self-service technology is segmenting the marketplace. One attendee held that some hotel customers might prefer an automated experience, while others, particularly in the luxury segment, would opt for a personal interaction.

Left to right: Oral Muir, Director of Global eCommerce Channels, Marriott International; Bill Carroll, Senior Lecturer, Cornell School of Hotel Administration; Victoria Starr, President, Starr Map Company LLC; and Donald Smith, Vice President Hotels, SideStep, Inc.

A second session focused on the growing practice of co-branding in hospitality. Citing as examples the alliances between Renaissance Hotels and Starbucks, Hilton and Neutrogena, and W Hotels and Bliss, Professor Robert Kwortnik, Ph.D. described how co-branding is becoming a common practice, especially on the high end. Kwortnik stressed that one way to grow a brand is to differentiate it, which is what companies hope to achieve through co-branding. The key to a successful co-branding strategy, says Kwortnik, is for companies to link up with partners whose consumers are a natural fit for their brand. Once the partnership is established, he says, partners need to create a co-branding strategy and aggressively market to those consumers.

In another session, Professor Bill Carroll, Ph.D. evaluated the benefits of dynamic packaging on the Internet. While research shows that few travelers make dining or shopping decisions before they arrive at their destination, the Internet may lead to a higher degree of pre-trip planning. In fact, it may be that when travelers book their hotel online, they will also book their meals, show tickets, spa packages and tee times. Carroll said hotels could use such a tool to generate more revenue and enhance the guest experience.

The event was sponsored by the School’s Center for Hospitality Research. For more information about future roundtables at the Cornell Hotel School, please visit http://www.hotelschool.cornell.edu/chr/news/roundtables.html.

Featured Advisory Board Member

James Allen

James (Jim) Allen, a Michigan native, moved to Florida in 1970 where he held multiple positions within the food and beverage industry.

Jim found his avocation to be wine. He pursued this avenue of study building his bank of knowledge. He began his career at Southern Wine & Spirits (SWS) of America, Inc., now the nation's largest distributor of wines and spirits, when he joined SWS of Florida in 1978. His drive for excellence resulted in his establishment of a highly successful on-premise division.

His career with SWS of Florida progressed to SWS of Southern California where he held the position of Vice President, General Manager and enjoyed growth and expansion of the business. Building on previous successes, his talents were then utilized at SWS of Hawaii where he formed a first-rate sales staff and powerhouse distributor network.

After managing the Colorado division of SWS, as Executive Vice President, General Manager, Jim was named Executive Vice President/General Manager-Wines of Southern Wine & Spirits of New York in January 2005. In his latest role, Jim oversees all facets of the wine operation in the state and is an integral part of the SWS executive team.

Helping his employees realize their dreams and aspirations drives Jim. He continues his years of service in the industry for the excitement, diversity, new ideas and challenges which continually motivate him.

Cornell Research Fellows at Industry Events

Cornell's Center for Hospitality Research is pleased to announce its participation in I-CHRIE from July 26-30, 2006 at the Hyatt Regency Crystal City in Arlington, Virginia. The I-CHRIE annual conference is both a social and an educational event that provides opportunities for attendees to network, for members to attend the annual membership meeting, for acknowledgement of the annual awards winners and for I-CHRIE committees, special interest groups and its board of directors to meet to conduct the business meetings of the organization. For more information, please visit http://dev.chrie.org/i4a/pages/Index.cfm?pageID=3329.

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With record attendance in Monte Carlo in 2005, the 4th Annual International Hotel Conference moves to the spectacular Rome Cavalieri Hilton from 11-13 October 2006. The conference, co-sponsored by the Cornell School of Hotel Administration, focuses on hotel financing, development and management in Europe and beyond. The program will feature superb networking, deal making, and 100 industry expert speakers presenting 40 interactive sessions designed to engage the audience of executive level hoteliers, managers, owners, developers, lenders, members of the media, and those who service the hotel industry.  

Cathy A. Enz, Ph.D., Associate Dean of Industry Research & Affairs and The Lewis G. Schaeneman, Jr. Professor of Innovation & Dynamic Management, will be presenting at the conference. Additional information about the event, registration, sponsorships, and related activities can be found at the event’s web site www.internationalhotelconference.com, or by contacting the conference organizers, Morris Lasky and Mary Lou Koys of Lodging Unlimited, Inc. at mlasky@aol.com.

Human Resources Roundtable

The third Human Resources Roundtable, sponsored by Cornell's Center for Hospitality Research, will be held September 28-29, 2006, at the Statler Hotel, Cornell School of Hotel Administration. The Roundtable, chaired by Associate Professor J. Bruce Tracey, Ph.D., will be attended by over 20 executives from various sectors of the hospitality industry. Please contact Joe Strodel, Jr., at 607-255-4646, if you are interested in sponsoring this event.

2005 CHR Human Resources Roundtable

Featured Corporate Partner

A part of the Tata Group of companies, India's premier business house, Taj Hotels Resorts and Palaces comprises 57 hotels in 38 locations across India with an additional 14 international hotels in the Maldives, Mauritius, UK, Nepal, Sri Lanka, U.S. (The Pierre Hotel) Africa, and the Middle East. Over the years, Taj has won international acclaim for its quality hotels and its excellence in dining, business facilities, interiors, and world-class, personalized service.

In India, Taj is recognized as the premier hospitality provider, spanning the length and breadth of the country, and gracing important industrial towns and cities, beautiful beaches, historical and pilgrim centres, and wildlife destinations.