[Excerpt] What do we know about mandatory arbitration and its impact? Some existing studies have examined samples of employment arbitration cases, usually obtained from the American Arbitration Association (AAA), which is currently the largest arbitration service provider in the employment area. Although some early studies found relatively high employee win rates and damage awards in arbitration, comparable to those in litigation, these results were mainly based on arbitration under individually negotiated agreements or in the securities industry and involved relatively highly paid individuals. More recent studies using larger samples of cases based on mandatory arbitration agreements find much lower employee win rates and smaller damage amounts than typical in litigation. Existing studies, however, have not been able to account for differences in the types of cases that are heard in arbitration. In particular, previous work has not been able to systematically compare outcomes in arbitration and litigation in the same study.
In this study, we take a new approach to investigating mandatory arbitration that allows us to do a systematic comparison of arbitration and litigation, accounting for key factors that differentiate between the types of cases brought in these forums. We do this by collecting survey data on a comparable sample of arbitration and litigation cases from attorneys involved in those cases. We also investigate the overall experiences of the attorneys in representing plaintiff employees in mandatory arbitration and litigation. The ability to obtain and finance legal representation is a crucial, yet understudied aspect of the system of enforcement of employment rights. Absent the ability to obtain effective representation, employees may be unable to pursue and win cases even where their statutory rights have been violated. One of the potential benefits held out for arbitration compared to litigation is that it could provide a cheaper, more accessible forum to allow employee claims to be heard and adjudicated. It is certainly the case that existing research indicates many limitations of the litigation system, particularly the relatively poor outcomes obtained by plaintiff employees compared to other litigants. What we are able to investigate empirically in this study is whether mandatory arbitration ameliorates some of the limitations of the litigation system or whether it is equally or even more limited in its accessibility.