The Pros and Cons of Employment Arbitration Agreements


In recent years, the area governing employment arbitration agreements has evolved rapidly. That evolution accelerated in June, when the California Supreme Court issued a watershed decision in Iskanian v. CLS Transportation, which addressed the enforceability of class and representative action waivers contained in employment arbitration agreements. In light of this new case, employers are well-advised to reevaluate the pros and cons to utilizing these agreements.

Should the Company Utilize Arbitration Agreements? A Recent Empirical Study Says, “Yes.” -

A recent 2014 study by Dr. Mark D. Gough of Cornell University published in the Berkeley Journal of Employment and Labor Law examined nearly 700 recent employment discrimination cases, approximately 480 that reached verdict in litigation and approximately 210 that were decided in arbitration. The results were astonishing. The data revealed that employees pursuing litigation in courts were nearly 40 percent more likely to win, and received average awards nearly twice as large as employees in arbitration.

Originally published in Orange County Business Journal on August 18, 2014.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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