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This chapter analyzes the extent to which more experienced employers, arbitrators, and attorneys fare better in securities industry arbitration. Although studies into experience have identified a so-called repeat-player effect on outcomes, I argue that more nuanced considerations of experience are required.

I empirically analyze all employment arbitration awards from the securities system’s inception through 2008. I separate experience into two categories (between- and within-group effects) and run hybrid random- and fixed-effects regressions modeling increasing employer, attorney, and arbitrator experience on arbitration outcomes.

I find that between-group experience affects awards but that within-group experience is nonsignificant, except in civil rights cases. This implies that so-called repeat players gain an advantage over inexperienced players due to their entity-specific characteristics, not necessarily by learning to use the system to their advantage. I conclude that, although the securities arbitration system suffers from power imbalances, there is little evidence of systemic exploitation by firms.

Prior studies into employment arbitration are limited both by their definitions of experience and by their methodological approaches. I overcome these issues by employing a novel methodological approach to measure between- and within-entity experience, which adds a more multifaceted and nuanced framework to the literature than the common repeat-player versus single-player dichotomy.

Using an institutional theory perspective (micro and macro), the authors examined employment lawsuits across case type and alternative dispute resolution methods (negotiated settlements versus trials and arbitrations).

The authors examined actual data from US federal court lawsuits (N = 98,020). The data included the type of lawsuit, the dispute resolution method used and the outcome of the lawsuit in terms of the dollar amounts awarded.

The results show that employers were more likely to win in high social context cases (civil rights) than in other cases (Employment Retirement Income Security Act of 1974, ERISA). In arbitrations, plaintiffs won more frequently and were awarded higher amounts in arbitration than in court trials. In arbitration, plaintiffs received more in high social context cases than in other cases.

The results show that employers lose more often and in larger dollar amounts in arbitration than in litigation. However, if arbitration rulings more closely matched the likely outcomes of trials, subsequent litigation would be less likely to be overturned, and transaction costs would be reduced. If this were the case, the arbitration of employment lawsuits would more closely match the arbitration of contractual grievances under the typical labor relations system, where the arbitrator’s decision is usually final and binding. This could be a better outcome for all stakeholders in the dispute resolution process.

This is the first study of its kind to examine actual workplace conflicts that result in employment-related lawsuits from the perspective of social contextual factors.

This paper uses 1992 nonunion employment arbitration awards to examine how parties currently use arbitration outside collective bargaining. It presents descriptive data on the costs of arbitration. It compares employer and employee claims, and finds that employees win higher damage awards. Employees recover a higher proportion of the damages they claim or have a better outcome than employers, notwith‐standing the theory that an arbitrator will rule in favor of employers because they have more resources to pay the arbitrator. While both employers and employees have lower outcomes when the arbitrator is paid a fee, this appears to be because the fee‐paying cases are higher stakes claims, and higher stakes claims result in proportionally lower damage awards. The findings tend to contradict the theory that employment arbitrators will be biased in favor of employers in a nonunion setting.

We examine how different neutral sources and third-party neutral qualification differences relate to mediation and arbitration usage at large US firms. Neutral sourcing is controversial, particularly in employment arbitration, where many have expressed concern that unregulated sourcing arrangements may bias outcomes in favor of employers. We use agency and structure theories to hypothesize that firms will be less likely to use mediation when the neutral is sourced as a result of court-annexed mediation, but that firms may be more likely to use arbitration when the neutral is sourced from a private third-party provider. Utilizing human capital theory, we also hypothesize that organizations will use both mediation and arbitration more frequently when neutrals are perceived to be more highly qualified. Empirically, we rely on data gathered from a survey of US Fortune 1000 corporations to test these hypotheses and find support for each of them. Our results suggest that, while firms uniformly value professionalization in their neutrals, employers may impose structures on themselves in high-stakes circumstances like arbitration to ensure standardized and consistent processes, but prefer agency in lower-stakes circumstances like mediation.

With the rise of employer-promulgated mandatory employment arbitration, scholars have become concerned that these policies may reduce the economic viability of lower value employment claims. Of particular worry are claims made under the Fair Labor Standards Act since the FLSA does not include punitive damages. This study empirically tests the relationship between 368 Fortune 1000 companies’ employment arbitration policies and their wage and hour violations discovered during the Department of Labor inspections. Surprisingly, firms that used arbitration were found to have fewer violations and lower back wages for those violation compared to firms that did not use arbitration. This suggests that viewing arbitration merely as a cost-reduction tool may cast the practice too narrowly and instead it may be part of a larger conflict management system that seeks to address conflict at the earliest possible stage.

This chapter investigates attributes of an unexplored actor in the contemporary industrial relations system – plaintiff-side employment attorneys – and the premise that pre-dispute mandatory employment arbitration expands employee access to justice.

It presents data from a novel survey of 1,256 employment plaintiff attorneys and the universe of employment disputes administered by the five largest arbitration providers in the United States.

I report multiple measures indicating employment lawyers hold negative views of arbitration and that arbitration acts as a barrier to employee access to justice: A majority of attorneys say employment arbitration clauses have a positive impact on their willingness to reject a case for representation and a negative impact on their willingness to accept a client under a contingency-fee arrangement, and report negative perceptions of the fairness of outcomes and the adequacy of due process protections in arbitration relative to litigation. Furthermore, attorneys report accepting potential clients covered by arbitration agreements at half the rate of potential clients able to sue in court. Finally, arbitration and litigation filing statistics reveal no evidence that low-income or low-value claimants or claims are accessing the arbitration forum.

Novel data compiled here illuminate the institutional characteristics of plaintiff-side employment lawyers and the arbitration forum. They question the assertion that arbitration is an accessible dispute resolution forum for employment disputes relative to civil litigation.

Arbitration – a binding private third-party adjudication – has been the primary legal way for resolution of consumer disputes. Consumers, however, rarely use arbitration to resolve their disputes while evidence suggests that their disputes remain unresolved. Contrary to the current prevailing emphasis on who is winning in arbitration, this study aims to establish that consumers believe that the court is more just than arbitration, regardless of the outcome. This study further establishes that consumers’ perceived poor legitimacy and lack of familiarity, not cost calculation, are what drive their justice perception.

In three experimental studies, participants were presented with scenarios in which they were to envision themselves amid a consumer dispute. The scenarios were followed by survey questions that examined individuals’ perceptions of justice. Three mediating variables of legitimacy, cost and familiarity were also examined.

The results suggest that consumers hold a high perception of justice for court as opposed to arbitration. Even though a favorable outcome increases consumers’ perception of justice, the results suggest that consumers find courts to be fairer regardless of the outcome. Familiarity and legitimacy mediate this relationship, not cost.

Current research does not provide an adequate explanation for consumers’ underutilization of arbitration nor does it focus on correct factors. Studies in psychology and law primarily focus on ex post feelings of individuals after dispute resolution, ex post favorable outcomes and ex ante cost–benefit analysis. To the best of the authors’ knowledge, the present study for the first time analyzes ex ante consumer perception of justice.

SMEs are essential to economic growth in Malaysia and many emerging economies as they are a major source of employment and contribute towards the gross domestic product. It is therefore imperative that the corporate governance practices of SMEs are enhanced by assurance that appropriate monitoring occurs and procedures are in place. This study aims to address this issue.

The concentration of ownership in Malaysian companies results in less protection for minority shareholders. This is because the laws protecting minority shareholders mainly focus on director/shareholder conflicts and are not suited to companies with concentrated shareholdings, especially where the conflict is commonly seen between the majority and minority shareholders. Furthermore, owing to the levels of power distance, collectivism and assertiveness in Malaysia, shareholders are unlikely to litigate. The research was carried out through case analysis and analysis of extant literature and existing laws in Malaysia, to illustrate that the minority shareholders in the concentrated shareholding SMEs are not well protected.

The paper finds that current prohibitive models of law are not desirable as they have promoted compliance with the letter but not the spirit of the law.

The study focuses only on SMEs that have been incorporated.

The study enables minority shareholders to reduce fraud and self‐dealing by the majority through more direct participation in corporations, reliance on procedural protections to balance business flexibility and application of brightline rules which stand a better chance of compliance by those who understand them.

The self‐enforcing model is a non‐adjudicative mechanism of enforcement which requires substantial compliance with procedural requirements and aims for voluntary compliance. It proposes that minority shareholders and independent directors hold veto powers, thus reducing fraud and self‐dealing.