PROS AND CONS OF ARBITRATION

Arbitration can be an effective method of resolving employment related disputes. Some of the more significant advantages of arbitration are that arbitration can resolve disputes more quickly than standard litigation. Furthermore, depending on the particular arbitration, it can be less expensive than litigation. In some arbitration programs, the discovery and pleadings are not as extensive as standard litigation. Furthermore, there is no jury in arbitration which reduces the expenses of preparing certain motions, pre-trial conferences, orders, and time spent in trial. As a result, arbitration hearings usually are shorter whereas jury trials often take more time. Another advantage of an arbitration is the absence of a jury Studies have indicated that arbitration awards in employment cases are approximately one half of the average size of a jury verdict. Thus, arbitration can protect an employer from a run-away jury which bases its award on emption or sympathy rather than law.

Disadvantages of arbitration include the fact that even arbitration can be a risky undertaking for both sides as there are fewer checks on the arbitrator's discretion and only limited rights to challenge the arbitrator's decision. Furthermore, an employer is responsible for paying all of the arbitration fees and the arbitration process must allow for adequate discovery. Therefore, the savings may be minimal depending on the type of case. There is also a perceived concern that an arbitrator might ignore the facts in the law and simply "split the baby".

The decision of whether to include arbitration provisions in employee contracts and/or handbooks requires careful thought and consideration. It is recommended that employers contact their counsel to determine whether an arbitration program is suitable for their company.