10 Compelling Reasons for Employment Arbitration: The Parties Choose the “Judge”

Managing litigation risk should be a priority for all employers. Mandatory employment arbitration programs create a framework of dispute resolution that helps give employers a measure of control and predictability over their exposure to employee claims. This second of 10 installments discusses the benefit to both employer and employee of the ability to select the fact finder who will resolve their dispute.

The Second Compelling Reason: The Parties Choose the “Judge”

Arbitration programs also afford the parties the advantage of choosing the legal professionals who will resolve their disputes. When disputes are filed in court, judges are, in almost all cases, randomly assigned. As a result, the parties may find themselves before an adjudicator who is new to the bench, unfamiliar with the vagaries of particular employment laws, or both. Additionally, the case will almost certainly fall into a long line of other cases before that judge, and delays can be, and often are, extensive and beyond the control of the parties.

With the power to choose their arbitrator (or arbitrators, depending on the terms of the arbitration agreement) the parties can seek out and appoint a decision-maker who has substantial experience in the relevant subject matter.  To be sure, good arbitrators are often former judges—but not always. Often experienced employment law practitioners make a second career as arbitrators and their services can be very valuable for dispute resolution.

Typically, the parties will engage in an arbitrator-selection process that involves choosing potential arbitrators from a list with some version of a “strike” process. A strike process has each party reject arbitrators from a common list until one candidate is left and is appointed to adjudicate the parties’ dispute. Or, each party will rate the individuals on the list of potential arbitrators, and their respective lists will be exchanged and compared through the arbitral forum for matches. In any event, the arbitration agreement should be drafted with an eye toward an efficient process that allows the parties to select a competent arbitrator with the relevant and necessary experience. Picking the arbitrator also allows the parties to find someone with a calendar that suits the parties’ mutual needs instead of being subject to the court’s calendar.

To be sure, employers may often pay the lion’s share of the arbitrator’s hourly fee under the arbitration agreement. In many jurisdictions, relevant case law and related public policy dictate that because there are relativity minimal fees associated with court litigation, the employee should not be required to pay more fees than the employee would pay in a court litigation (e.g. where there is no fee for the judge’s time). Nonetheless, the comparative efficiency of the arbitration process, as opposed to the prolonged resolution of a case through the typical clogged court docket, more than compensates for the arbitrator’s fee.

In sum, the ability to choose the legal professional who will adjudicate the dispute offers the parties significant efficiency that goes a long way toward resolving disputes expeditiously and economically.

The third installment of the 10 Compelling Reasons for Employment Arbitration will examine the impact of arbitration on the parties’ strategy.

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