AAA Employment Arbitration: A Fair Forum at Low Cost - Dispute Resolution Journal - Vol. 58, No. 2

Elizabeth Hill holds an L.L.M. in Labor and Employment Law (N.Y.U.) and is a Research Fellow at the Center for Labor & Employment Law at New York University School of Law. Ms. Hill has completed two empirical studies of mandatory employment arbitration. The second study, “Employment Arbitration and Litigation: An Empirical Comparison,” written with Prof. Theodore Eisenberg of Cornell University School of Law, will be published by the Institute for Judicial Administration at NYU School of Law. Ms. Hill previously practiced litigation in New York City.

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Originally from Dispute Resolution Journal

The debate over whether mandatory employment arbitration forces employees to give up civil rights has raged for more than a decade virtually without empirical support on either side. Elizabeth Hill recently completed a statistical study of employment arbitration under the auspices of the American Arbitration Association. Her results indicate that mandatory employment arbitration is not biased in favor of employers and that it is fair and affordable to lower-income employees. The author summarizes the major findings of her study in this article.

The debate over “mandatory” employment arbitration is one of the most important issues in arbitration and employment relations today. It has been the subject of three major Supreme Court decisions in the past decade, including a 2001 decision which held that “mandatory” arbitration agreements are generally enforceable.1 Mandatory employment arbitration has also been the subject of a vigorous national lobbying effort aimed at limiting its use.2 Surprisingly, the debate over the propriety of mandatory employment arbitration has been waged for a decade largely without the benefit of hard data describing it. Both critics and advocates of mandatory employment arbitration acknowledge the dearth in empirical research and agree that there is a need to fill the gap.3 This article describes my recent attempt to begin to fill that gap with a study of 200 employment arbitration cases, which were decided under the auspices of the American Arbitration Association (AAA), the largest independent provider of arbitration services in the United States. My research was not intended to prove a hypothesis, but to provide a comprehensive statistical description of AAA employment arbitration based on the data derived from the 200 individual awards. At the end of the day, my findings, which are detailed below, indicate that AAA employment arbitration is affordable and substantially fair to employees, including those employees at the lower end of the income scale.4