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Employees were awarded money in just 1.6 percent of arbitration cases in 2020, according to the AAJ report, which analyzed data reported by the nation's two largest arbitration providers, the American Arbitration Association and JAMS. Decisions are final and cannot be appealed, as they can in court.
The primary reasons employers across both public and private sectors prefer arbitration to litigation is its timeliness and cost-effectiveness. The Supreme Court itself has noted that the arbitration process has many advantages to litigation because it is less expensive, less disruptive, and more flexible.
Typically, the arbitrator is mutually chosen by the worker and the employer. However, if the worker and employer cannot agree, an arbitrator may be appointed by a court or suggested by a third-party provider (an organization or service that keeps a list of approved arbitrators).
In such cases, arbitration will almost always favor the defendant employer. Nearly every attorney who represents working people in employment cases will agree that arbitration agreements are not the best choice for employee plaintiffs.
A mandatory arbitration agreement should identify the rules, procedures, and evidentiary guidelines to be applied. Many agreements opt for a particular forum's rules and procedures. If there are any rules that the parties want to opt out of (e.g., a limitation on discovery), state as much in the arbitration agreement.