Employees may find themselves facing arbitration under a wide range of circumstances. New York law allows employers to mandate arbitration in employment contracts, and arbitration is commonly used to resolve labor disputes as well. Employers and employees can also voluntarily agree to arbitrate after a dispute arises instead of taking their dispute to court. If you are facing employment arbitration, what can (and should) you expect? Our New York employment arbitration lawyers explain:
Employment Arbitration: An Overview of the Process
Arbitration is a form of alternative dispute resolution (ADR) that provides a venue for employers and employees to resolve disputes without going to court. While arbitration and mediation are both forms of ADR, they are very different, and it is important to ensure that you have a clear understanding of the specific form of ADR you are facing. Additionally, while arbitration shares some similarities with litigation (taking an employment or labor dispute to court), there are several fundamental differences between arbitration and litigation as well.
Arbitration vs. Mediation
Here is an overview of the key differences between arbitration and mediation:
- Neutral Third-Party – In mediation, a mediator serves as a facilitator, relying on his or her experience and insights to help guide the parties toward a mutually agreeable resolution. In arbitration, an arbitrator (or arbitration panel) renders a binding decision after hearing evidence and arguments from both sides.
- Formality – Mediation is a relatively informal process—it is essentially a form of guided negotiations. Arbitration involves more structure and formalities than mediation, but it is still significantly less formal than litigation.
- Process – Mediating an employment dispute involves working with the mediator over a series of mediation sessions to try to reach an agreement. Arbitrating an employment dispute involves taking discovery, presenting arguments and evidence to the arbitrator (or arbitration panel) at a hearing, and then receiving a binding decision at the end of the process.
- Potential Outcomes – The goal of mediation is to reach a settlement agreement. However, neither party is obligated to settle. Arbitration, in contrast, will result in a binding decision in favor of one of the parties with regard to each of the issues involved in the parties’ dispute.
- Appeals – There isn’t an appeals process for mediation. If mediation is successful, the parties will settle their dispute and move on. If it isn’t successful, the parties will need to pursue arbitration or litigation. Under the Federal Arbitration Act, arbitration decisions are subject to appeal on limited grounds.
Arbitration vs. Litigation
Here is an overview of the key differences between arbitration and litigation:
- Decision-Maker – Arbitration and litigation both result in a binding decision rendered by a neutral third party. In arbitration, this is the arbitrator (or arbitration panel). In litigation, this is the judge.
- Formality – Arbitration involves many of the same procedures as litigation, including discovery, motions practice, and presenting arguments and evidence at a hearing (or trial). However, arbitration eschews many of the traditional formalities of litigation, and employers and employees have significantly more flexibility to structure the arbitration process to make it as efficient as possible.
- Process – The arbitration process can roughly be described as a simplified and streamlined version of litigation (although there are several key differences). Both arbitration and litigation can be contentious, and with both processes, each party’s goal is to achieve a resolution that protects its rights to the fullest extent possible.
- Potential Outcomes – As discussed above, arbitration results in a binding decision rendered by the arbitrator (or arbitration panel). In litigation, the judge will render a decision on each of the claims asserted in favor of one party or the other.
- Appeals – As also discussed above, arbitration awards are subject to appeal on limited grounds. Trial judges’ decisions are subject to appeal on limited grounds as well, though the potential grounds for appealing a trial verdict are generally broader than those for appealing an arbitration award.
Employment Arbitration: Step By Step
The employment arbitration process follows a series of steps that are designed to facilitate an efficient resolution to the parties’ dispute. Importantly, while the arbitration process allows employers and employees to obtain a binding decision if necessary, settlement negotiations often play a major role in the process as well. If an employer and employee agree to settle their dispute before their arbitration hearing date arrives, the process will end when they sign a settlement agreement.
Generally speaking, the major steps in the employment arbitration process are as follows:
- The arbitration process begins when one party (i.e., either the employee or the employer) files a demand for arbitration with a third-party arbitration provider such as the American Arbitration Association (AAA) or JAMS.
- Once the process has been initiated, the parties will need to select the arbitrator (or arbitrators) who will handle their dispute. If the parties cannot agree, they will each submit their selections for consideration by the arbitration provider.
- Following arbitrator selection, the parties will typically jointly participate in a management conference. During a typical management conference, the parties will cover matters such as scheduling, the scope and means of discovery, and any procedural issues that need to be addressed before they can turn to the substantive issue(s) at hand.
- The discovery process comes next. During discovery, the parties will request and exchange information that is relevant to their dispute. If disagreements arise (which is not uncommon), the parties can seek a resolution from the arbitrator (or arbitrators) as necessary.
- Settlement negotiations will often take place both during and after the discovery phase of arbitration. If the circumstances warrant, the parties may also agree to mediate in order to either reach a complete settlement or to narrow down the issues that they will present at their hearing.
- If the parties have not settled by the time their hearing date arrives, they will present their arguments and evidence to the arbitrator (or arbitration panel). After considering the arguments and evidence from both sides, the arbitrator (or arbitration panel) will issue a decision addressing each of the claims involved in the parties’ dispute.
Discuss Your Case with a New York Employment Arbitration Lawyer for Free
If you are facing a dispute with your employer and need to know more about the arbitration process, we invite you to get in touch. To discuss your case with an experienced New York employment arbitration lawyer at Bell Law Group in confidence, please call 516-280-3008 or request a free consultation online today.
