In comparing arbitration to litigation, it would be misleading to compare the time, cost and risk of resolving a case at an arbitration hearing to the time, cost and risk of resolving a case at trial. After all, in most employment cases, the defendant’s primary strategy isn’t to win at trial – it’s to avoid trial by winning summary judgment. And, while we haven’t studied hard data, we have the unscientific impression that employers enjoy a substantial summary judgment win rate, especially in federal court.
Thus, an accurate assessment of the pros and cons of arbitration should factor in summary judgment. If an employer agrees to arbitrate employment disputes, is the employer effectively committing to arbitrate every dispute at a hearing before an arbitrator? Or can employers move for, and more importantly win, summary judgment at arbitration?
As a starting point, there’s no doubt that arbitrators have authority to grant summary judgment. Major arbitration providers—including the American Arbitration Association (“AAA”) and JAMS—maintain rules that expressly allow parties to file and arbitrators to grant pre-hearing dispositive motions. (See for example, AAA Employment Arbitration Rule 27 and JAMS Employment Arbitration Rule 18.) Even when a forum’s rules are silent, arbitrators have broad discretion to control proceedings and employers may include in their arbitration agreements or policies explicit authority for arbitrators to allow summary judgment motions.
So arbitrators can grant summary judgment, but will they? According to conventional wisdom, not often. Some arbitrators may discourage dispositive motions out of concern that courts might more readily vacate awards granting summary judgment than awards issued after hearing. Other arbitrators may view complex motion practice as incompatible with the speed and informality of arbitration. Still others may consider it important to give the parties the chance to tell their stories at a hearing.
But some practitioners dispute that summary judgment is harder to win in arbitration. They note that arbitrators are almost never too busy to give a summary judgment motion careful attention, as can happen in some overcrowded state court systems. It’s plausible that even arbitrators who generally disfavor summary judgment will grant it when a hearing would be pointless, for example, when a claim is untimely or the key facts and communications are captured in writing. And even when summary judgment is granted on the core merits, one commentator has persuasively argued that there’s very little risk of a court disturbing the award.
Empirical information about arbitrators’ willingness to grant summary judgment in employment cases isn’t easy to find. An unscientific 2012-2013 survey of several hundred arbitrators suggested that many, if not most, of them had rarely or never granted dispositive motions. But the survey included arbitrators outside the United States and was not focused on employment cases. And some observers have suggested that dispositive motions in arbitration have become more widely accepted since the survey was conducted.
We suspect that summary judgment is probably harder to win in arbitration than in court, but we don’t necessarily see that difficulty as a deal-breaker for an employer seeking efficient dispute resolution, for several reasons. First, during arbitrator selection, employers who may wish to move for summary judgment can focus on avoiding arbitrators who are categorically unreceptive. Second, even when an arbitrator denies a motion for summary judgment, the motion may help the arbitrator see the key weaknesses of an opponent’s case and therefore result in a shorter, narrower arbitration hearing. Finally, even if summary judgment were entirely unavailable in arbitration, arbitration would often be less burdensome than litigation. Bringing a few key witnesses to an arbitration hearing may be less costly and disruptive than producing the same key witnesses (and often other non-key witnesses too) for depositions in litigation, and then preparing summary judgment declarations and briefs. Certainly the cost of document production and other written discovery is almost always much lower in arbitration than in litigation. Also, not every case is a summary judgment winner. Sometimes an employer may be confident that truth and justice is on its side—but only as a matter of common sense and witness credibility, perhaps not as a matter of law. Arbitration allows employers to decline to settle such cases without putting the company’s fate in the hands of a jury. And for large employers, the prospect of potentially avoiding class actions may drive the decision more than the cost of any one arbitration.
The bottom line is that the low likelihood of obtaining summary judgment could be a downside of arbitration for many employers. There is some debate about whether employers are actually less likely to win summary judgment at arbitration than in litigation. But even if the chances of winning summary judgment are slimmer in arbitration, arbitration may still be less costly and disruptive than litigation all things considered, and other benefits may favor adopting an arbitration program.