Originally from:

AAA Handbook on Employment Arbitration and ADR - Third Edition

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I. Introduction

Recent data suggests that 15 to 25% of employers now require their employees to arbitrate employment disputes and that 25% of all nonunion employees are now bound to such agreements. The US Supreme Court has upheld arbitrations for class actions finding “the Federal Arbitration Act controlled over state laws that nullify binding arbitration for class claims.”

Arbitration has many benefits and, included among them, is cost and efficiency. In fact, studies show that, on average, it takes three times longer to litigate claims than to arbitrate them. 

Despite the relative speed for resolving disputes through arbitration, the cost and efficiency of the process is often criticized. If parties seek adjournments, file numerous motions and demand extensive discovery, the arbitration will strongly resemble litigation. Unfortunately, attorneys tend to do in arbitration that which they have become accustomed to do in court. While arbitrators can curtail some abuses through educating the parties about the need for efficiency and through rulings that will expedite the process, much of the responsibility rests with the parties. Arbitrations can be cost effective and efficient if the suggestions below are followed.