Individual Employment Rights Arbitration in the United States

Abstract

The authors examine disposition statistics from employment arbitration cases administered over an 11-year period by the American Arbitration Association (AAA) to investigate the process of dispute resolution in this new institution of employment relations. They investigate the predictors of settlement before the arbitration hearing and then estimate models for the likelihood of employee wins and damage amounts for the 2,802 cases that resulted in an award. Their findings show that larger-scale employers who are involved in more arbitration cases tend to have higher win rates and have lower damage awards made against them. This study also provides evidence of a significant repeat employer-arbitrator pair effect; employers that use the same arbitrator on multiple occasions win more often and have lower damages awarded against them than do employers appearing before an arbitrator for the first time. The authors find that self-represented employees tend to settle cases less often, win cases that proceed to a hearing less often, and receive lower damage awards. Female arbitrators and experienced professional labor arbitrators render awards in favor of employees less often than do male arbitrators and other arbitrators.