Employment Arbitration in the Securities Industry: Lessons from Recent Empirical Research

In this Article, we use evidence gathered from employment arbitration cases arising in the securities industry to address several research questions that emanate from the debate over the arbitration of employment disputes. We empirically answer the following questions: (1) Are critics correct in asserting that employment arbitration favors repeat players? (2) Do employees fare better under voluntary arbitration than they do under mandatory arbitration? (3) Are employees who allege violations of their civil rights, through the filing of discrimination charges, treated differently from those filing other types of claims? (4) Does the gender of the parties involved in the arbitration process affect outcomes in any way? (5) Is there evidence that companies learn from, or are affected by, the results of prior arbitration awards when dealing with a current claim? Although the literature has offered some answers to these questions, this Article provides a holistic review and overview of the arbitration experience within the securities industry and a summation of quantitative evidence on the subject

The Devil Is in the Details: Attorney Heterogeneity and Employment Arbitration Outcomes

Conventional wisdom holds that hiring a lawyer will improve outcomes for non-union employees who take individual rights complaints to arbitration. However, the limited amount of empirical scholarship into this topic has rarely accounted for the concurrent influence of employer representatives, or for the presence and effects of employee and employer attorney heterogeneity. I analyze all arbitration awards rendered within the securities industry from the implementation of its ADR program through the late-2000s, and first find that hiring an attorney benefits employees only in the rare cases that employers do not also include an agent. I then account for attorney selection into cases by limiting the analysis to only claims that involved attorneys. I use biographical records for each lawyer to explore attorney heterogeneity in education, expertise, gender, experience, and other characteristics. I examine longitudinal changes in attorney characteristics over time, and empirically test how these differences affect outcomes. I find that many employee and employer attorney characteristics vary and have grown more pronounced over time, and several of these variations shape outcomes. I conclude that although hiring an attorney may not redress power imbalances within employment arbitration, more nuanced analyses reveal that they are important to the system and certain types of lawyers can provide important benefits

Organizational Conflict Resolution and Strategic Choice: Evidence from a Survey of Fortune 1000 Companies

In this paper we develop the argument that a firm’s ADR strategies are likely to be associated with a firm’s use of one conflict resolution option or the other. More specifically, we examine whether a firm’s use of either arbitration or mediation is a function of (1) the extent to which the use of either of these dispute resolution processes aligns with the goals and objectives management is seeking to advance, and (2) the extent of the firm’s commitment to the use of these practices. We expect to find that an organization’s use of either mediation or arbitration may be governed by different underlying strategic objectives as well as the firm’s broader commitment to ADR. In what follows, we further develop this strategic choice argument

Resolving Discrimination Complaints in Employment Arbitration: An Analysis of the Experience in the Securities Industry

This article empirically examines whether employment discrimination claims differ from other types of disputes resolved through arbitration. Whether arbitration is appropriate for resolving violations of anti-discrimination statutes at work is a focus of ongoing policy debates. Yet empirical scholarship has rarely considered whether different types of complaints might have distinct characteristics and receive varied outcomes in arbitration. The authors analyze all of the employment arbitration awards for cases filed between 1991 and 2006 in the financial services industry to determine whether differences in the type of allegation affect award outcomes. They also examine the effects of the financial industry’s decision in 1999 to introduce voluntary arbitration for discrimination claims. Results indicate that discrimination claims largely fared worse in arbitration than did other statutory or nonstatutory claims but that arbitration systems are capable of meaningful self-reform

Mandatory Employment Arbitration: Dispelling the Myths

[Excerpt] Using mandatory arbitration to resolve employment disputes has been a major source of controversy since the practice emerged about twenty‐five years ago. On one side of the debate have been proponents of the practice, who contend that mandatory pre‐dispute arbitration provides a faster and cheaper means of resolving employment disputes than relying on conventional litigation

Unions and ADR: The Relationship between Labor Unions and Workplace Dispute Resolution in U.S. Corporations

Published in cooperation with the American Bar Association Section of Dispute Resolutio

Employment Arbitration in the Securities Industry: Lessons from Recent Empirical Research

In this Article, we use evidence gathered from employment arbitration cases arising in the securities industry to address several research questions that emanate from the debate over the arbitration of employment disputes. We empirically answer the following questions: (1) Are critics correct in asserting that employment arbitration favors repeat players? (2) Do employees fare better under voluntary arbitration than they do under mandatory arbitration? (3) Are employees who allege violations of their civil rights, through the filing of discrimination charges, treated differently from those filing other types of claims? (4) Does the gender of the parties involved in the arbitration process affect outcomes in any way? (5) Is there evidence that companies learn from, or are affected by, the results of prior arbitration awards when dealing with a current claim? Although the literature has offered some answers to these questions, this Article provides a holistic review and overview of the arbitration experience within the securities industry and a summation of quantitative evidence on the subject.Lipsky123_Employment_arbitration_in_the_securities_industry.pdf: 51 downloads, before Oct. 1, 2020

Resolving Discrimination Complaints in Employment Arbitration: An Analysis of the Experience in the Securities Industry

This article empirically examines whether employment discrimination claims differ from other types of disputes resolved through arbitration. Whether arbitration is appropriate for resolving violations of anti-discrimination statutes at work is a focus of ongoing policy debates. Yet empirical scholarship has rarely considered whether different types of complaints might have distinct characteristics and receive varied outcomes in arbitration. The authors analyze all of the employment arbitration awards for cases filed between 1991 and 2006 in the financial services industry to determine whether differences in the type of allegation affect award outcomes. They also examine the effects of the financial industry’s decision in 1999 to introduce voluntary arbitration for discrimination claims. Results indicate that discrimination claims largely fared worse in arbitration than did other statutory or nonstatutory claims but that arbitration systems are capable of meaningful self-reform.Lipsky116_Resolving_Discrimination_Complaints.pdf: 315 downloads, before Oct. 1, 2020