We’ve been talking a lot about employment arbitration since the passage of AB 51. We’ve discussed the bill itself, and we’ve reassessed the pros and cons of workplace arbitration since its passage. But what’s all the fuss about? It seems that every legislative session in California, we get a new bill attempting to do away with pre-dispute arbitration agreements. Sometimes similar measures come from the Senate.
The lawyers who represent employees have been fighting to do away with workplace arbitration for years. Some have reported that this is an offshoot of the #MeToo movement. But the battle began well before then. The reasoning has nothing to do with arbitrators being biased (they are certainly better at applying the law to the facts than juries) or plaintiffs not having an effective way to vindicate their rights (they can bring the same claims for the same remedies). Nor are arbitration proceedings secretive, as some have argued. Nothing prevents employees in arbitration from publicizing their claims or the outcome.
The issue here is money. Everyone knows that, because juries are more likely to be swayed by emotion than arbitrators, a jury is more likely to grant a windfall verdict. A corollary of that is that cases that are heading to a jury trial (with the greater possibility of an emotion-fueled verdict) tend to settle at a higher dollar amount than cases that are headed to arbitration. Sure there are other arguments for and against arbitration. But it would be naive to underestimate the financial motives behind this battle — on both sides.