Someone please explain to me the benefits of having forced arbitration at all; what's the benefit of having disputes (including sexual harassment disputes) resolved behind closed doors without any possibility of appeal?
Much cheaper, faster, and more private for all parties, plus I believe it prevents class action lawsuits. And don't forget the possibility that the arbitrators (who are paid by the company) favor their benefactor…
For example, you mention sexual harassment; the victim (and certainly the accused) might not want all those details in the public record.
If it is such a huge benefit to everyone then both parties will simply always agree to it in the pre-lawsuit negotiation phase, and you don't need a preexisting agreement to mandate it.
Corporations often insist on adding it to their employment contracts and employees almost never insist it be added to an employment contract that was missing it, so you can guess who it benefits.
The thing is, if the employer and the employee both wanted arbitration, neither would need to be forced into it - something along the lines of "arbitration is always available as an option with consent of all parties" written into the contract would be perfectly fine.
Many union contracts call for arbitration. The advantages in that scenario is that it is faster and more definitive. Usually unions and management have some sort of process to pick the arbitrator in a manner deemed acceptable.
Advantages are speed, privacy and cost. You also avoid the political risk of the court district that you are in.
In an individual vs company situation, it’s always better for the employer, unless the employee can hire the arbitrator. If the company hires the person, that arbitrator may find it difficult to get future work if they side with the company.
From the article: "Forced arbitration ensures workplace disputes are settled behind closed doors and without any right to an appeal. These types of agreements effectively prevent employees from suing companies."
When employment contracts including a binding arbitration clause, the employee is agreeing to resolve conflicts privately with the company rather than through public means, such as a lawsuit. This reduces the public profile and resolution of such an action.
Plus, private arbitration is private. The terrible things the companies do to employees don't end up on public records. You can't even tell how often they are being taken to inverse kangaroo court.
Arbitration is also far cheaper than court. The average person filing a lawsuit is going to be much more confident than one going through arbitration, so of course, lawsuits end up being more successful.
I could be wrong but I understood one of the problems is misaligned incentives. If the arbitrator is to be kept in business then it's tough for them to rule against businesses that bring cases to them consistently even if the case merits it, which disadvantages employees. In reality I've heard it indeed doesn't turn out fair.
His point is if it is such a net win for everyone, then you can simply agree to it at the time the lawsuit is being put together. The forced clause where you pre-agree to it is because they know it isn't always a benefit to both parties. Corporations often push for the forced clause and employees almost never do.
Imagine we have a civil dispute; you get your lawyer, I get my lawyer, we go to a judge, and the judge makes a decision. Forced arbitration is if instead when we had a civil dispute, we just went to my lawyer, and my lawyer made the decision.
