Originally from Dispute Resolution Journal

This is a condensed version of papers presented at the Research Conference on Arbitration, NYU Institute of Judicial Administration, Sept. 19-20, 2002, and at the 2003 American Law and Economics Association Annual Meeting, Toronto.

The authors conducted empirical research comparing court case and arbitrated outcomes for employment disputes. In cases not involving civil rights claims, they found little evidence that arbitrated outcomes materially differed from trial outcomes where the claimant was a higher-paid employee. Moreover, they found no statistically significant differences between employee win rates or in the median or mean awards in arbitration and litigation. They also reported evidence indicating that arbitrated disputes conclude more quickly than litigated disputes.

The struggle for adjudicatory authority continues. The business establishment tends to prefer legal professionals—both judges and arbitrators—over juries when it comes to resolving employment disputes.1 The civil rights community, consumer advocates, and the plaintiffs’ bar tend to prefer judges over arbitrators and seek to protect access to juries.2 This tension is particularly strong in statutory employment disputes since the Civil Rights Act of 1991 vested greater authority in juries in employment discrimination cases.3

In the 1990s there was a massive, now well-documented, increase in arbitration. From 1995 to 1997, the General Accounting Office found that the percentage of employers using arbitration for employment disputes increased from 10% to 19%.4 From 1997 to 2001, the number of employment cases filed with the American Arbitration Association (AAA) increased 60%, from 1,347 to 2,159.5 Employers flocked to arbitrators to further distance themselves from juries despite the fact that rather little was known about the relative performance of arbitrators.