Common reasons that employment arbitration fails

Employment arbitration, sometimes called employment mediation, fails many times. Often, employees do not realize until later that this method of conflict resolution did not prove effective for them. Here is a look at the weaknesses of arbitration.

It is biased toward employers

Employers tend to hold all of the cards. For example, employees may have to sign an agreement governing arbitration before they even start the job. Such an agreement may say that they cannot sue the employer and must instead go through arbitration, with all of the rules decided by the employer.

It is possible that good lawyers can find loopholes or workarounds in contracts like this, but the mere presence of this clause leads many workers to feel that they should take what they can get in arbitration. Instead, they could be doing well in court, regardless of what prompted the issue in the first place, be it discrimination due to sexual orientation, race, age or something else.

Also stacking the deck in favor of employers is the fact that they may be repeat customers of the same arbitrator. This person may be more likely to find in favor of the employer time after time. It is also possible that the employee may end up on the hook for the employer's arbitration costs, including lawyer fees. Not many people want to bring a case for arbitration if they could owe many thousands of dollars afterward.

Court cases are more effective

Even if an employee chooses of his or her own will to go through arbitration, the fact is that court cases tend to prove more effective. Employees should expect to win fewer damages, if any, if they shy from the court route. Reasons for this often include the following:

• Employees have a reduced ability to challenge arbitration decisions.
• There are changing burdens of proof with arbitration.
• Discovery rules are more expansive in court and increase the odds of an employee win.
• Employees in arbitration may have a limited time in which to present their cases.
• Many law firms work on contingency, meaning they take their cut after a decision. If you lose in court, you owe nothing.

In sum, the court route could come at little monetary cost to an employee and help prove a case while arbitration could end up costing a lot and lead to losing the case.

If you are an employee considering arbitration or wonder about that arbitration clause you signed in your employment contract, it can help to get in touch with an attorney. Many offer free consultations.