3 Ways Workers Can Improve Their Prospects In Arbitration

Posted March 15th, 2019.

As It Appeared On

By Braden Campbell

Law360 (March 15, 2019, 7:25 PM EDT) — While legal standoffs between workers and employers over arbitration agreements have become increasingly common in recent years, best practices for scoring a win once a case lands before an arbitrator have received considerably less attention. Here, plaintiffs counsel share how lawyers on their side of the bar can even the odds in what they say is an unfair forum.

Pick the Right Arbitrator

Plaintiffs attorneys would prefer to avoid arbitration for many reasons, among them their perception that arbitrators, as a group, tend to favor businesses over workers. This belief has two bases: Many more arbitrators represented businesses than workers in their past lives as attorneys, and businesses tend to end up in arbitration more often than individual workers, so decision-makers who rule for employers may get more work.

“We sometimes hear from our colleagues on the management side that someone on their firm has had a bad experience with a mediator or arbitrator and then their firm won’t use that particular person going forward,” Schwartz Perry & Heller LLP partner Brian Heller said. “There’s a real risk to an arbitrator that they’re going to be blackballed.”

So if your client ends up in arbitration, you “want to make sure that the arbitrator is someone who isn’t trying to curry favor with the [legal] defense industry … to get more cases,” said Sanford Heisler Sharp LLP litigator Ed Chapin.

Unlike court, parties in arbitration have a say in who decides their dispute. While the exact mechanics can vary depending on the arbitration provider and what’s in the controlling agreement, the parties are generally given a list of possible arbitrators.

The parties strike a certain number of names from the list, and each ranks the remaining candidates. The arbitration provider then assigns the case to the arbitrator with the highest joint rank.

Heller said he researches arbitrators by looking up whatever public findings exist and pinging other attorneys for their thoughts on specific names, preferring those with more employment expertise and less time working for defense firms.

“You’re not going to find someone who’s been a plaintiffs lawyer for 20 years, but you definitely want to stay away from someone who’s been a management lawyer for 20 years,” he said.

Plaintiffs attorneys also have dedicated electronic mailing lists for discussing arbitrators. These not only allow plaintiffs attorneys to share intel, but they send a message that worker-side attorneys are “collective consumers of arbitration” in the same way management-side attorneys are “repeat customers,” said Nichols Kaster PLLP litigator Matthew Helland.

“Plaintiffs counsel are sharing information about arbitrators and are educating themselves about these arbitrators, and in that way [plaintiffs] become a consumer of arbitration that arbitrators must reckon with,” Helland said.

Pile It On

Employers have increasingly made their workers forego court for arbitration following a series of U.S. Supreme Court rulings reinforcing the ability to do so.

Many of these arbitration agreements also make workers waive their rights to bring class action claims, which plaintiffs attorneys say saps a key source of leverage over employers. But there’s another way workers’ attorneys can exert similar pressure: File for a bunch of arbitration proceedings.

“A case that would have been a class action or collective action but for a class-action waiver can become a mass arbitration, where we file dozens or hundreds of individual arbitrations,” Helland said. “That’s an important strategy, because generally speaking the employer has to pay for the cost of arbitration.”

Mass arbitration “changes the calculus” for employers not only because it costs more than court, but because arbitration rulings generally don’t bear on other, similar claims. An employer only has to beat a class action once to avoid liability, while it still has to defend other disputes in a mass arbitration even if it wins one or two.

But if a plaintiff side notches the first win, that gives them leverage to push the employer for big settlements on the other claims, Helland said. Employers may also reconsider whether mandatory arbitration makes financial sense if plaintiffs start filing en masse, he said.

Play to the Venue

Arbitration is like court in many ways, but there are a few key differences plaintiffs attorneys should keep in mind to give their clients their best shot at a payout.

As professional triers-of-fact, arbitrators are far more savvy about the legal process than juries. This means plaintiffs attorneys can often cross-examine evasive witnesses more aggressively in arbitration than they can in court, Sanford Heisler Sharp’s Chapin said.

“In arbitration, you have a little more flexibility, or ability to zero in” on cagey witnesses, Chapin said. “I’m a 6’5”, 280-pound guy, and if I get really tough with a witness, a jury might hold it against me.” But plaintiffs attorneys should still be wary of overdoing it and getting on the arbitrator’s bad side, he said.

The rules of evidence tend to be more relaxed in arbitration than in court, Chapin added. The big employment players — the American Arbitration Association and JAMS — each have their own rules, but “whether more evidence or less evidence gets discovered and admitted depends upon the arbitrator,” he said.

Given this uncertainty, plaintiffs attorneys should “apply the rules and be assertive and go after it as best you can,” Chapin said.

Heller, of Schwartz Perry & Heller, likewise said plaintiffs’ priority in arbitration should be getting whatever they need in discovery to make their case. From there, the goal should be getting to a hearing as quickly as possible, he said.

“These are cases that rely on interpretations of people’s motivations and looking through the self-declared innocent company to find out what the discriminatory motivation was,” Heller said. “You can’t win that type of case on paper.”

–Editing by Philip Shea and Pamela Wilkinson.

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