State Courts Vacating More Arb. Awards for Employees than Employers

Labor & Employment

State Courts Vacating More Arb. Awards for Employees than Employers

Posted Apr 21, 2008, 06:55 am CDT
By Molly McDonough

State courts are vacating many arbitration awards for employees these days, a pattern that reveals a "disturbing trend" according to one recent study.

The University of Illinois College of Law's Michael LeRoy took a look federal and state court review of employment arbitral awards. The National Law Journal reports that the data suggests a "snowballing futility for employees."

"When courts vacate many awards that rule for employees, the individual must either return to a lengthy and costly 'do over' arbitration—or worse, be stuck with a useless award, and no other recourse" because a supreme court ruling prevents them from suing, the study said. Court review is becoming "an insurance program that protects employers from costly awards."

According to the NLJ, LeRoy's database includes 443 federal and state court rulings on arbitration awards from 1975 to 2007. His findings reveal statistically significant differences in victories in the state appellate courts.

In the federal courts, where judicial review is more consistent under the Federal Arbitration Act, employer and employee awards are being upheld more evenly.

LeRoy theorizes that employers are benefiting by a "repeat player effect," because they have learned the system and know how to better make it work to their advantage.

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