Employment Arbitration and Litigation: An Empirical Comparison

American workplace dispute resolution in the individual rights era

“…More recent research has examined larger datasets of employment arbitration cases administered by the American Arbitration Association or AAA (the largest private organization providing arbitration services in the United States), which included only cases brought under the type of mandatory employer-promulgated arbitration procedure considered in the Circuit City case (Colvin 2008). This research found an employee win rate in mandatory arbitration hearings of only 21.4% (Colvin 2011), which is substantially lower than the employee win rates found in studies of litigation trials, which range from 36.4% in the federal courts (Eisenberg and Hill 2003) to 59% in state courts (Oppenheimer 2003). Similarly, the median damage award received by employees was $36,500 in employment arbitration (Colvin 2011) compared to median damage awards for employees as high as $150,500 in federal courts (Eisenberg and Hill 2003) and $296,991 in California state courts (Oppenheimer 2003).…”

“…This research found an employee win rate in mandatory arbitration hearings of only 21.4% (Colvin 2011), which is substantially lower than the employee win rates found in studies of litigation trials, which range from 36.4% in the federal courts (Eisenberg and Hill 2003) to 59% in state courts (Oppenheimer 2003). Similarly, the median damage award received by employees was $36,500 in employment arbitration (Colvin 2011) compared to median damage awards for employees as high as $150,500 in federal courts (Eisenberg and Hill 2003) and $296,991 in California state courts (Oppenheimer 2003). These results indicate that outcomes from mandatory arbitration cases are much less favorable to employees than those from employment litigation in the US courts.…”

“…In this area, Colvin (2011) found that the mean time to receive a hearing in mandatory arbitration was 361.5 days. This compares favorably to average times to trial in litigation of 709 days in federal courts or 818 days in state courts (Eisenberg and Hill 2003). Greater speed to trial has a clear advantage in employment disputes as it reduces the period of ongoing disruption to individuals' careers and to organizational functioning.…”

“…One approach to answering this question is to simply compare the results of past arbitration and litigation cases. Early studies by Delikat and Kleiner (2003) and Eisenberg and Hill (2003) suggested that outcomes in arbitration and litigation were relatively similar. However, these studies compared litigation outcomes with arbitration in the contexts of the securities industry (Delikat and Kleiner 2003) and under individually negotiated arbitration agreements (Eisenberg and Hill 2003), which tend to involve relatively highly paid professionals and executives likely to have more personal resources, better representation, and greater prospects of success in dispute resolution.…”

“…Early studies by Delikat and Kleiner (2003) and Eisenberg and Hill (2003) suggested that outcomes in arbitration and litigation were relatively similar. However, these studies compared litigation outcomes with arbitration in the contexts of the securities industry (Delikat and Kleiner 2003) and under individually negotiated arbitration agreements (Eisenberg and Hill 2003), which tend to involve relatively highly paid professionals and executives likely to have more personal resources, better representation, and greater prospects of success in dispute resolution. More recent research has examined larger datasets of employment arbitration cases administered by the American Arbitration Association or AAA (the largest private organization providing arbitration services in the United States), which included only cases brought under the type of mandatory employer-promulgated arbitration procedure considered in the Circuit City case (Colvin 2008).…”