[quote author="Minimorty" date=1256074549]EvaL -
Please correct me if I am wrong, but does arbitration favor the employer over the employee because most of the lawsuits brought about are frivolous and BS?</blockquote>
It's good to see you have an open mind when you want to learn something. But let's pretend for a minute that you are actually interested in the answer. No, some of the reasons that arbitration tends to favor the employer over the employee are as follows:
1. Repeat player effect. XYZ corporation has an arbitration clause in its employee handbook that says that all arbitrations are to be held before the American Arbitration Association in its OC office. Obviously AAA likes having a regular source of business. While AAA arbitrators are professionals and would not consciously find in favor of the company that is responsible for their hire or discount an award to a employee that has brought a claim in order to curry favor, there is the very real potential for unconscious bias in favor of the "repeat player" over the "one time" player. <em>See</em>, Lisa B. Bingham, Employment Arbitration: The Repeat Player Effect, 1 Employee Rts & Emp. Pol?y J. 189 (1997) (finding that employees recover a lower percentage of their claims in ?repeat player? cases than in non repeat player cases).
2. Less opportunity to conduct discovery. You might not have the opportunity to take depositions or ask for documents in an arbitration. While a sexual harassment case might be "he said / she said," it becomes a completely different ball of wax when you find out that a manager's last four subordinates resigned complaining of harassment. You might not find out this important fact unless you depose the HR people.
3. The time for "trial" and the number of witnesses each side can call may be limited. In the example above, if the plaintiff wanted to bolster his credibility with the arbitrator by calling the four prior employees, he may not be able to, or will have to choose between calling some or all of them, and calling other witnesses to testify as to other damages (e.g., the plaintiff's shrink).
4. The arbitrator, unlike a jury, need not follow the substantive law or even apply the rules of evidence. This is determined by the scope of the arbitration provision.
There are others, but those are the some of the biggies. Don't forget, these provisions are very rarely, if ever, negotiable. They are often presented on a "take it or leave it" basis.
<blockquote>Also, I would imagine a panel of three judges/lawyers with experience relating to the specific issues and laws at hand would make better decisions, on average, then John Six Pack and Suzy Q in a jury box.</blockquote>
Well, first of all that assumes that the arbitration agreement calls for a panel of three, much less anyone with experience in the substantive area of the law. I've seen arb agreements that call for one person and others that call for three. I have seen arb provisions that don't require the arbitrator to be a lawyer or judge or have any experience in the subject matter to be decided. I have seen arb agreements that do not tell the arbitrator to apply any law and that the decision is good whether it conforms to the law or not.
Also, it appears that you are not familiar with the litigation process (you should sit for jury duty some time!), as you are unaware that a jury isn't the sole determiner of the outcome. While a jury verdict is given much deference, it is not the only consideration. If a case even reaches trial (and a good chunk don't due to being dismissed under pre-trial procedures), the judge can dismiss the case at the close of plaintiff's case (known as a directed verdict), the judge can "overrule" a jury's verdict (known as a judgment notwithstanding the verdict), or determine that certain things happened at trial such that a new trial should be had. There is also an opportunity to appeal to a higher court.
<blockquote>Arbitration may not be perfect for employment disputes, but again, nobody is forcing anybody to work for a company that uses arbitration.</blockquote> That is absolutely correct, and why California says that predispute arbitration clauses are perfectly allowable in the employment relationship if the agreement to arbitrate meets certain conditions.
