isn't that good for employees and bad for the employer? Each employee can do the same exact arbitration, and win. The employer, rather than wasting lawyers for 1 class action, now must pay for each individual arbitration
Most people in this situation are struggling to feed their family, they don't have time for arbitration. And the only way they'd get representation is from someone doing a class action for a cut of the winnings. So they either need litigation with teeth (big class actions with massive punitive damages) or regulatory oversight with similar strength, to make employers unwilling to risk it. Or strong unions that can negotiate and effectively with hold labor as a group.
It depends a lot on the wording of the arbitration agreement.
Many of these people are struggling to make ends meet and it’s a lot of effort and lost work to risk for a small payout, but if enough individual claims are won it doesn’t take much effort for some lawyers to start automating the process and file tens of thousands of claims like those against Uber.
Oh no - you're facing millions of dollars in mandatory fees to defend against thousands of nearly identical cases in arbitration? My goodness, who forced you to adopt that arbitration clause? How terrible of them.
That depends on (1) whether future arbitration cases are guaranteed the same outcome as those already settled, and (2) whether this outcome becomes as generally known amongst victims as a class action lawsuit would be.
Lastly: I'm not a corporate lawyer, so I don't know what legal reasons a company has to prefer arbitration over legal procedures. But they must have some. And those reasons are unlikely to lead to worse outcomes for the company.
Arbitration is a contentious legal issue, despite being present in many types of contracts.
It is contentious because legal research has repeatedly demonstrated that there are legal fields in which for an undetermined reason the plaintiff faces far longer odds than they would have in court.
This concerns arbitrations that in 90% of cases are in favor of the defendant. While in 'normal' case law you see rates closer to 60%. (Yes the research also accounted for cost differences by comparing similar classes of cases, no-cure-no-pay etc..)
It is also suspected that the plaintif usually gets less compensation for damages through arbitration.
Another issue is that arbitrators sometimes earn a lot money and are obviously incentivised to attract 'customers'. The problem is that there are and will always be many more plaintiffs than there are defendants. So the selection of arbitrators depends on decisions by the future-defendants. (Unless a specific organisation is legally mandated, but I've not encountered this before)
How do they measure the number of cases that go either way? I assume this excludes settlements? If so it would explain the discrepancy. Arbitration is so much cheaper than going to trial that it would make sense to try a weaker case just based on risk vs reward.
Employer often selects the arbitrator and is therefore a repeat player. This sets incentives for the arbitrator, no matter how fair they intend to be.
Also, pretrial discovery is much broader in a class action, so much more expensive. The procedures available to a plaintiff in an arbitration are much more limited.
But big picture, it’s better to have more options rather than fewer.
Arbitration does not have precedent, so each case has to be argued separately and can have different outcomes. On top of that burden and can have fee-shifting provisions that set a significant hurdle to pay upfront costs on the employee. Class action waivers are bullshit.
Yeah not a lawyer and not sure if it’s a good for employees not, but I think companies started recently removing arbitration clauses because of this reason?
Cars are often more convenient than public transit, but many people can’t afford a car payment, insurance, maintenance, fuel, parking, tolls, etc. For these people, if there’s no bus/train, they walk or bike, even if it’s not safe or is not time-efficient to do so.
