Arbitration: Fairer, Faster, and Better for Employees

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May 30, 2019

When it comes to solving disputes between employees and their employer, money doesn’t matter, and time isn’t precious. Or at least, that’s what opponents of employment arbitration would like you to think.

Two weeks ago, ILR released a study showing that employee-plaintiffs are more likely to win cases, get more money, and get it more quickly through arbitration compared to litigation.

The study, performed by ndp | analytics, analyzed nearly 100,000 cases between 2014 and 2018 and found that employee-plaintiffs in arbitration compared to litigation won:

  • Three times more often than in litigation (32% of cases vs 11%);

  • Almost twice as much money as in litigation ($520 thousand on average vs. $270 thousand); and

  • In far less time than in litigation (569 days on average vs 665).

ILR also released the results of a national survey finding strong, bipartisan public support for arbitration.

Despite this clear evidence of the advantages and popularity of arbitration over lawsuits, some lawmakers are not convinced.

Two weeks ago, the House Judiciary Committee’s Subcommittee on Antitrust, Commercial and Administrative Law held a lengthy hearing on arbitration. Supporters of lawsuits over arbitration weren’t looking for an objective examination of the issue, as evidenced by Full Committee Chairman Jerrold Nadler’s (D-NY) hearing title: “Justice Denied: Forced Arbitration and the Erosion of Our Legal System.”

Instead, the purpose of the House majority’s exercise was to build support for the blizzard of anti-arbitration (forced litigation) bills introduced over the last few months. For that reason, the hearing included four witnesses testifying against arbitration, and only two testifying in favor (including Andy Pincus of Mayer Brown, testifying on behalf of ILR).

Andy cited the clear statistical evidence that employee-plaintiffs do better in arbitration. Professor Myriam Gilles of Cardozo Law School responded by admitting that class actions might not be the “most efficient” way of getting dollars in people’s pockets, while contending that this was not really important and repeating her condemnation of arbitration in general.

When confronted with clear evidence that employee-plaintiffs are more likely to get more money more quickly through arbitration, the opponents of arbitration seem to argue that money doesn’t matter and time isn’t precious.

This doesn’t make much sense if one is really on the side of the employee or consumer. It makes more sense if one is on the side of the plaintiffs’ lawyers, who are perhaps the group that benefits most from litigation.