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The authors conducted empirical research comparing court case and arbitrated outcomes for employment disputes. In cases not involving civil rights claims, they found little evidence that arbitrated outcomes materially differed from trial outcomes where the claimant was a higher-paid employee. Moreover, they found no statistically significant differences between employee win rates or in the median or mean awards in arbitration and litigation. They also reported evidence indicating that arbitrated disputes conclude more quickly than litigated disputes.
The struggle for adjudicatory authority continues. The business establishment tends to prefer legal professionals-both judges and arbitrators-over juries when it comes to resolving employment disputes.1 The civil rights community, consumer advocates, and the plaintiffs' bar tend to prefer judges over arbitrators and seek to protect access to juries.2 This tension is particularly strong in statutory employment disputes since the Civil Rights Act of 1991 vested greater authority in juries in employment discrimination cases.1
In the 1990s there was a massive, now well-documented, increase in arbitration. From 1995 to 1997, the General Accounting Office found that the percentage of employers using arbitration for employment disputes increased from 10% to 19%.4 From 1997 to 2001, the number of employment cases filed with the American Arbitration Association (AAA) increased 60%, from 1,347 to 2,159.5 Employers flocked to arbitrators to further distance themselves from juries despite the fact that rather little was known about the relative performance of arbitrators.
Although the legality of mandatory employment arbitration is firmly established,6 it remains controversial.7 Both its increasing use in the midst of this controversy and questions about its fairness suggest that further study is needed.
A central question bearing on both arbitration policy and the long-term struggle over adjudicatory authority is whether arbitrated outcomes materially differ from litigated outcomes. Allegations that arbitration leads to unfair employee losses and lower awards are of particular concern. There are some anecdotal horror stories about mandatory arbitration that would support restrictions on the process,8 but there is no authoritative evidence that arbitration is inferior to in-court adjudication. True, one study reports that jury trial awards in employment discrimination cases are at least three times higher than arbitration awards.9 But the evidence is not uniform. Lewis Maltby reports that employees prevailed in 63% of employment arbitrations compared to...