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Study Regarding Employment Arbitration Outcomes Released

Published by on February 7, 2008

The Workplace Prof Blog discusses a recent study regarding outcomes in employment arbitrations.  Previous posts on this topic at this blog are here, here and here.  The author notes an increase in the number of arbitrations over the years since the Supreme Court’s Gilmer decision and suggests that recent data shows that outcomes are less […]

The Workplace Prof Blog discusses a recent study regarding outcomes in employment arbitrations.  Previous posts on this topic at this blog are here, here and here.  The author notes an increase in the number of arbitrations over the years since the Supreme Court’s Gilmer decision and suggests that recent data shows that outcomes are less favorable to employees in arbitration both in terms of outcomes and damage awards.

The abstract from the article is as follows:

This article reviews the existing empirical research on employment arbitration and presents new findings based on analysis of data from recent American Arbitration Association employment arbitration case filings. Whereas past research often concluded based on more limited datasets that outcomes from employment arbitration were generally similar to those from litigation, results of the present study, which is based on a larger dataset focused on cases involving employer promulgated agreements, indicate that both employee win rates and damage awards in employment arbitration are significantly lower than in litigation. By contrast, results of the present study confirm previous research findings that time to hearing is generally shorter in employment arbitration than in litigation. As with past research, the present study finds evidence of a repeat player effect, though with some uncertainty as to the causal explanation for this effect. Self-representation of employees is found to be associated with significantly worse employee win rates and damage awards, particularly where the case involves by a repeat employer-arbitrator pairing. Lastly, the article reviews research indicating some positive impacts of employment arbitration on the adoption and operation of internal organizational dispute resolution procedures.

Expect the debate to continue as more empirical data becomes available.

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