Originally from Dispute Resolution Journal

The authors compared the results of jury trials in federal court in the Southern District of New York with the results in NASD securities arbitrations. Their findings contradict charges that private arbitration programs are “structurally biased” against employees who have civil rights claims. The authors found that in arbitrated and litigated employment cases completed during the same period, claimants had a higher success rate in the arbitrations than they did in litigated cases in federal court.

In an effort to provide some modest additional empirical research to assist the policy debate over mandatory employment arbitration1 and give parties an additional basis for evaluating the selection of a dispute resolution forum, our firm, Orrick, Herrington & Sutcliffe LLP, studied the outcomes of employment cases in three different fora. For each group studied, we determined the average jury award for all verdicts, the percentage of verdicts in which the employee-plaintiffs prevailed, the average verdict size in favor of employees, and the median verdict (i.e., the number above and below which there is an equal number) for the plaintiff.2 Because the cases did not all fall within the same time period, we were unable to compare the results in all three groups. Thus, for purposes of this article, we are presenting the results for two groups of cases for which we have comparable information. The first group is made up of employment discrimination disputes resolved in the U. S. District Court for the Southern District of New York (S.D.N.Y.) between April 1, 1997 to July 31, 2001 (the N.Y. Federal Court Trials). The second group includes securities arbitrations between January 1989 through February 2002 in proceedings administered by the National Association of Securities Dealers (NASD) and the New York Stock Exchange (NYSE) (collectively, the Securities Arbitrations).