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Comment by deogeo | Hacker News Reader

Such as https://www.epi.org/publication/mandatory-arbitration-unfair... ?

1. EPI is a lobbying org, so this is not exactly unbiased. The paper this comes from is a policy paper about the "arbitration epidemic".

2. It makes the weird underlying assumption that the people in court should be winning as much as they do. The fact that a difference in numbers exists is interesting but doesn't tell you whether it is fair or not.

So i guess i would ask. Imagine someone does a completely objective analysis of the gap and determines federal courts are in fact, the problem, and people are winning meritless lawsuits in court but not arbitration.

Would you be supportive of doing something about that?

3. Here is a more academic paper for you:

https://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?a...

This is in fact, the original source for the 21.4% number EPI quotes.

EPI conveniently (in their own policy paper) leaves out the paragraph starting with :

"This employee win rate is substantially lower than that found in previous employment arbitration studies, which tended to use selective samples. It is also lower than employee win rates in litigation. However, it should be noted that we may be comparing apples and oranges here in that the characteristics of cases in arbitration may differ systematically from those in litigation.

....

The task for future research is then to analyze what factors may explain this gap and whether or not it is problematic from a public policy perspective "

EPI does not do that.

Here's a more recent analysis: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3238460

An interesting note: "In fact, in a variety of settings, no variable affects win rates as dramatically as whether a plaintiff hires attorneys with arbitration experience."

It is entirely possible the difference in win rates is due to the fact that in court employees are using experienced employment lawyers and in arbitration they are not using lawyers experienced in arbitration (meanwhile, the corporations do because they are sued so often).

Or because more of the claims are meritless in federal court or a ton of completely fine things.

Helpful, thank you! That's quite an interesting result to consider.

I'm curious why I haven't seen any signs of people going after the arbitration firms and their impartiality, rather than going after the companies using those firms.

It’s because the problem is the existence of the system, not that the instigating companies haven’t learned or cared to learn how to obscure the unjust advantage they are buying.

Would you say the same thing if arbitration firms ruled in favor of employees more often than courts did?

(I'd also be interested in knowing why the comparison was with "federal court" and not "any court".)

> I'm curious why I haven't seen any signs of people going after the arbitration firms and their impartiality, rather than going after the companies using those firms.

I think the reasoning people have is the alignement of incentives is messed up:

Big companies will use arbitration if it provides them a cheaper alternative than going to actual courts.

The arbitration firm that is more employer friendly will save more money to a company than a firm that is less employer friendly, therefore the company is more likely to hire the first one. And arbitration firms are more likely to be employer friendly since their financial success is impacted.

Ending arbitration isn't necessarily the right solution, since courts could be too crowded, but maybe authorizing it, only if the case is handle in a timely fashion, and the employee has a right to "appeal" to a regular court , could make it more fair and more economical to both sides?

The last employment arbitration agreement I remember looking at, the company didn't just get to choose whatever arbitrator they wanted. It was a symmetric process.

Right now, this is just the convenient bogeyman of the day. The problem is the data to do such a thing simply doesn't exist. Once you get past the policy positions, it's sparse.

I posted some studies from SSRN, etc in my other comment here, but: Most studies that try to objectively evaluate the data (and there are plenty that don't on both sides!) don't come up with obvious "the arbitrators are unfair" or "court is right more of the time" answers. This is why you see the policy folks go after the win rates.

It is definitely true that large scale studies agree that the win rate is less in arbitration (There are some smaller scale studies cherry picking data that find otherwise).

The large scale studies though don't have enough data to say whether that win rate makes sense or not.

I posted the most recent one (not yet published) which tries to understand the variables affecting win rate.

Trying to objectively take 1000 cases in court/arbitration and say "what should have happened" has not occurred. Without something like that, it is hard for folks to make a meaningful case that there is a real problem.

Despite what the prevailing viewpoint here seems to be, the truth is if someone did that study, in as unbiased a way as possible, it would likely be significantly more convincing to the judiciary than what they see now (trying to convince the populace/politicians is much harder :P)

For example, right now if you ask federal judges (no matter what their politics) whether they think all the winning employment legal cases before them deserve to be winning, their answer is a resounding no.

If it was a resounding yes, or the data showed the opposite effect in arbitration (IE people were losing cases they shouldn't), you'd have an easier time getting courts to buy that arbitration was actually harming people.

But we can't seem to get past the policy positions and "people should always be in court" mentality.

It's really quite sad.

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