A Comprehensive Guide to Arbitration and Mediation in Employment Disputes

The Judicial Branch of California notes that Alternative Dispute Resolution (ADR) processes help people resolve disputes without having to file lawsuits and deal with trials. Arbitration and mediation are perhaps the two most common kinds of ADR, and some people may sign contracts that involve mandatory binding arbitration or mediation that prohibits them from filing a lawsuit.

It is important for people to understand that mediation and arbitration are not the same kind of process, and the type a person is involved in could have a major effect on their legal rights. Any person who is dealing with possible arbitration or mediation in California should quickly contact an experienced Los Angeles small business attorney.

How Arbitration Works

It is not uncommon for many contracts nowadays to include provisions stating that any dispute relating to the contract must be resolved through arbitration. In arbitration, a neutral third party known as an arbitrator will hear each side’s arguments and evidence before rendering a decision.

Arbitration can be either binding or nonbinding. Binding arbitration means that both parties waive their right to trial and agree to accept an arbitrator’s decision as final with no right to appeal the arbitrator’s decision, but nonbinding arbitration means that both parties will be free to request a trial when they do not accept the arbitrator’s decision.

While some parties may be able to seek an independent arbitrator to hear their case, many arbitration agreements designate arbitration agencies such as the American Arbitration Association or JAMS (formerly known as Judicial Arbitration and Mediation Services, Inc.) to resolve disputes. The main advantage of arbitration will be the speed with which a decision can be rendered, as arbitration can typically lead to a result within a matter of months as opposed to the possible years a person could spend pursuing a claim in court.

After an arbitrator is selected, there will typically be a preliminary meeting to discuss a dispute. The claimant provides a summary of matters in dispute and outlines their proposed reward, while the respondent provides a statement of response and counterclaim.

After claims and responses are made, there is a period of discovery and inspection. Parties must list relevant documents in their control and give the other party time to inspect them.

When the parties agree on evidence to be shared, the documents will be sent to the arbitrator to review before the hearing. During the hearing, both sides will be given the opportunity to present their cases and an arbitrator reviews the evidence and renders a decision.

The rules of arbitration can be a bit looser than traditional trials, meaning people may be able to present evidence that would have otherwise been inadmissible. Another major benefit to arbitration is that it is typically confidential, meaning that certain sensitive topics will not be a matter of public record.

Arbitration works best for parties who want quick resolutions to their disputes without the time and costs of a trial. Some people may prefer arbitration when they simply want a person with a legal background to render an appropriate decision.

Arbitration will not be best for any person who wants greater control over how their case is decided. Binding arbitration will mean neither side has the right to appeal an arbitrator’s decision, and even appeals in nonbinding arbitration decisions could involve possible penalties if a party requests a trial and does not obtain a more favorable result through trial than arbitration.

How Mediation Works

In mediation, a neutral third party known as a mediator helps the two sides reach a settlement agreement. Mediation will often be nonbinding, meaning that either party can reject a proposed resolution and possibly seek other legal recourse.

A mediation session will usually be held in some mutually agreeable location for both parties. The mediation could be conducted in a single room or both sides could have their own rooms and the mediator goes between the rooms.

It is difficult to estimate the amount of time that mediation can take, as some parties may arrive at a resolution rather quickly while others could still have disagreements that cause their cases to be stretched out over several days. Like arbitration, mediation can again offer people the opportunity to resolve their legal disputes at a fraction of the cost of going to trial.

Mediation is most effective for parties that have some relationship they hope to preserve, such as family members, neighbors, or business partners. Mediation may also prove to be helpful for particularly emotionally-charged debates because the mediator will listen to each side and try to help them find common ground.

Mediation is generally not recommended when one party is unwilling to compromise with their demands. It may not be effective when one party has some significant advantage over the other in terms of power.

Contact Our Los Angeles Small Business Attorney

If you need assistance figuring out a way to help train your supervisors, do not be afraid to seek legal help. Steinberg Law understands these kinds of concerns and can help companies all over California be compliant with state and federal law. 

Our firm has helped scores of businesses all over the Golden State. You can call (818) 855-1103 or contact our Los Angeles small business attorney online for a free consultation.