Hamada v. Westcott

Hamada v. Westcott: Hawaii Supreme Court Limits Arbitration Fee Awards

This case involved an employment dispute between a worker named Hamada and employer Jay Westcott that went to arbitration. After the arbitration process concluded, the arbitrator awarded attorney's fees and costs to one of the parties. The losing side challenged this fee award in court.

The Hawaii Supreme Court reversed the lower court's decision and ruled that arbitrators cannot award attorney's fees and costs unless the arbitration agreement specifically says they can. In this case, the arbitration agreement between Hamada and Westcott contained no language allowing for such fee awards, so the arbitrator had overstepped their authority by granting them.

This ruling matters for workers because it clarifies the limits of what arbitrators can do in employment disputes. When workers sign arbitration agreements as part of their employment, they should carefully review whether the agreement includes provisions for attorney's fees. Without such language, workers cannot be forced to pay their employer's legal costs even if they lose the arbitration. However, this also means workers cannot recover their own attorney's fees unless specifically allowed in the agreement.