Symposium on Labor and Employment Arbitration

Jaime Fell and everyone at #PennStateLaw organized this symposium as well as any I’ve seen. I learned a ton from Mark Gough’s data, and the abilities of each of the other speakers--Jill Gross, Rick Bales, and Ted St. Antoine—to draw on their experiences in the trenches of arbitration as well as their broader perspectives as prolific scholars.

9:30 AM — Professor Theodore J. St. Antoine's Presentation on "Making Arbitration a Fair and Accessible Remedial Process"

10:00 AM — Professor Stephen Ware's Presentation on "Labor Arbitration's Differences"

10:30 AM — Professor Richard Bales' Presentation on "What Makes a 'Reasoned' Arbitration Award?"

11:15 AM — Lunch

12:00 PM — Professor Jill I. Gross' Presentation on "The Final Frontier: Are Class Action Waivers in Arbitration Clauses in Broker-Dealer Employment Agreements Enforceable?"

12:30 PM — Professor Mark Gough's Presentation on "Employment Disputes in Mandatory Arbitration and Civil Litigation: Comparing Outcomes and Stakeholder Perceptions."

The Centrist Case for Enforcing Adhesive Arbitration Agreements

My latest article, The Centrist Case for Enforcing Adhesive Arbitration Agreements, was just published at 23 Harvard Negotiation Law Review 29 (2017)

The Abstract:

"The Politics of Arbitration Law and Centrist Proposals for Reform", 53 Harvard J. on Legislation 711 (2016), explained how issues surrounding consumer, and other adhesive,  arbitration agreements became divisive along predictable political lines (progressive vs. conservative) and proposed an intermediate (centrist) position to resolve those issues. However, "The Politics of Arbitration Law" did not argue the case for this centrist position. It left those arguments for two more articles: (1) "The Centrist Case against Current (Conservative) Arbitration Law", 68 Florida Law Review 1227 (2016), which argued against the overly-conservative parts of current arbitration law; and (2) this Article, which argues against progressive proposals to repeal, not only the overly-conservative parts of current arbitration law, but also the parts of current arbitration law that should be retained. While progressives would prohibit enforcement of individuals’ adhesive arbitration agreements, this Article argues that such agreements generally should be enforced.

Arbitration Speedier Than Litigation, Says AAA Study

The American Arbitration Association says "on average, U.S. district court cases took more than 12 months longer to get to trial than cases adjudicated by arbitration (24.2 months vs 11.6 months)." While one can always question whether the litigated cases studied are similar to the arbitration cases studied, this data fits the received wisdom from earlier data that arbitration tends to be quicker than litigation. This study is part of a broader website of AAA resources on arbitration.

American Arbitration Association Consumer Arbitration

More good work by my University of Kansas School of Law faculty colleague, Christopher R. Drahozal.  Professor Drahozal is serving as a Special Advisor to the Consumer Financial Protection Bureau on its study of arbitration clauses in consumer financial services contracts.

His abstract:

This chapter has provided an overview of consumer arbitrations administered by the American Arbitration Association, the largest administrator of consumer arbitrations. It does not, of course, purport to resolve the ongoing debate over arbitration and access to justice. A consumer’s incentive to bring a claim (and an attorneys’ incentive to take a case) depend on the costs of the process and the expected outcome in the forum. With the recent amendments to its consumer arbitration rules, the AAA reduced the cost to consumers of bringing claims in arbitration, both by lowering the upfront fees and by largely precluding reallocation of fees to consumers in the award. The expected outcome in arbitration (in particular, relative to the expected outcome in court) presents a much more difficult question because limits to available data preclude comparison of similarly-situated complainants. More research remains to be done.

Part of what I like about this chapter’s review of empirical studies is that it points out when selection effects make it hard to draw conclusions from the data.

Why Do Businesses Use (or Not Use) Arbitration Clauses?

Why Do Businesses Use (or Not Use) Arbitration Clauses?

by Christopher R. Drahozal and Stephen J. Ware

Some recent scholarship contends that arbitration is failing in its attempts to compete with litigation. When arbitration does succeed in attracting customers, such as businesses including arbitration clauses in their consumer contracts, commentators assert that it does so illegitimately, such as by enabling businesses to evade class actions and other forms of aggregate relief.

Both of these positions have found support in a pair of recent empirical studies authored by Theodore Eisenberg and Geoffrey Miller (and, for one of the studies, by Emily Sherwin as well). The first study examined the use of arbitration clauses in a sample of material contracts (such as loan commitments and merger agreements) filed with the SEC, and found that only a small percentage of the material contracts included arbitration clauses. The second study (with Professor Sherwin) compared the use of arbitration clauses in material corporate contracts of telecommunications and financial services companies with the use of arbitration clauses (and class arbitration waivers) in consumer contracts drafted by the same companies, and found a much higher use of arbitration clauses in the consumer contracts.

In this paper, we revisit the Eisenberg and Miller (and Sherwin) studies. The studies provide a fascinating and valuable look into the use of arbitration clauses in the types of contracts they studied. But as we show in detail, the types of contracts they studied are not representative of either business or consumer contracts as a whole. Indeed, the business contracts they studied are predominantly types unlikely to include arbitration clauses, while the consumer contracts they studied are among those most likely to include arbitration clauses and class arbitration waivers. As a result, their findings need to be construed narrowly, as limited to the types of contracts studied, and not as applicable to either business or consumer contracts generally.

The Effects of Gilmer: Empirical and Other Approaches to the Study of Employment Arbitration

The Effects of Gilmer: Empirical and Other Approaches to the Study of Employment Arbitration

An article by Christine Jolls, Accommodation Mandates, 53 Stanford Law Review 223 (2000), provides a framework for analyzing the effects of employment discrimination statutes. This article extends that framework to employment arbitration to describe the effects of enforcement of employees' pre-dispute arbitration agreements. The article also critically reviews empirical studies of these effects.