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Fortune 500 GC Says Litigate, Don’t Arbitrate, Employment Disputes

While most of the arbitration news of the week is about the unfair advantage given to corporate “repeat players” in the arbitration of disputes, Senior Legal counsel for DHL counsels employers to abandon arbitration’s ship and swim back into litigation’s pacific waters.

Though I’m the “pro” arbitration speaker with DHL in-house counsel Joshua Frank at this week’s ALFA Labor & Employment Practice Group Seminar in Half Moon Bay, I don’t have strong feelings one way or the other (preferring, as you can imagine, the negotiated, to the adjudicated, resolution).

Mr. Frank’s reasons for suggesting that the Courts are a better forum for employers and arbitration better for employees?

The “pros” of arbitration?  I’m saving them for the conference but will blog on them when I return.

    • Arbitration’s finality favors the employee because appellate judges have been “trending towards more favorable decisions for employers for several years.”
    • While arbitration providers have a vested interest in their case load persisting, the courts are interested in purging their dockets, thus making early termination in court more likely.
    • Arbitrators’ self-interest in maintaining and expanding their own ADR practices encourages a “split the baby” mentality and reluctance to terminate the case short of a full hearing.
    • Litigation is becoming faster and cheaper while arbitration becomes more procedurally encrusted and expensive, particularly in those states where the employer is  required to bear the entire expense of the arbitral forum.
    • Despite the Maryland Employment Lawyers’ recent observation that “median to average jury verdicts in discrimination cases [have been reported to be] at least three times higher than the comparable mean and median arbitration awards,” Plaintiffs actually do better overall in arbitration than in Court.
      • the evidence?  One study over a 12-year period showed that plaintiffs in employment disputes prevailed 38% of the time when the matter was adjudicated by a jury while plaintiff employees prevailed in 68% of the cases adjudicated by the AAA during the same time period.
    • Arbitration proceedings aren’t “complex, intimidating and confusing enough” to deter “frivolous” claims by employees.
    • The “repeat” player bias will favor the Plaintiffs’ bar who the arbitrator will see far more often than counsel for any particular employer.
    • Arbitration makes life too easy for plaintiffs’ attorneys.
    • The risks of litigation are manageable, with only an estimated six to eight percent of employment cases going to trial.
    • Great lawyers (assuming, of course, that the defense is more likely to hire the great ones) do better in litigation than in arbitration.

Victoria Pynchon

Attorney-mediator Victoria Pynchon is a panelist with ADR Services, Inc. Ms. Pynchon was awarded her LL.M Degree in Dispute Resolution from the Straus Institute in May of 2006, after 25 years of complex commercial litigation practice, with sub-specialties in intellectual property, securities fraud, antitrust, insurance coverage, consumer class actions and all… MORE >

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