Question

1. What are two advantages (to employers) of arbitration?

2. What are two disadvantage (to employees) of arbitration?

3. Would society benefit if the law were to forbid employers from requiring that their employees sign an arbitration agreement in order to be hired? Why or why not?

Answer 1

The advantage to the employers is that he arbitration is much less expensive as compared to the trial in court, which saves it money and resources incurred in the process. The other advantage is that arbitration is a private process which can be kept confidential and it does not affect the public image of the company.

Disadvantage for the employees is that arbitration is binding and they stand no chance of appealing for correcting the decision if they believe that the decision was not appropriate. Other disadvantage is that there is no clarity on the standards of arbitration used by the arbitrator, which make it potential target for unfair practices in the places where widespread corruption is prevalant and the employer might use its undue infleuence to tilt the things in its favour.

It would make the employee- employer relationship more meaningful and balanced, because in many cases the employers would be more cautious while dealing wih the employee issues, fearing the liitgation and its consequences. In case of mandatory arbitration, the employers are assured that there would be no chances of incurring huge litigation costs and damages and loss of face in public, and the arbitrator might also work in a way which is more favourable to the employers. This might lead to the company going against the employee interests and one is more likely to see anti employee policies with some employers. The removal of this clause would empower the employees more, and would be beneficial to the society.