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Employers should consider using mandatory jury-trial waivers instead of mandatory arbitration to supplement internal employee-dispute resolution programs. Few employers chose mandatory arbitration to resolve employment claims until after the Civil Rights Act of 1991, which for the first time made jury trials and compensatory and punitive damages widely available in federal employment discrimination actions. Before 1991, employees brought such cases at the rate of 8,000 to 9,000 a year, and employers won most of them. Since then, the filing rate has nearly tripled, and surveys showthat employers have lost almost half of the cases tried to a jury. Making matters worse, jury trials take longer, cost more and pose a higher risk of a large award for compensatory and punitive damages. But by far the biggest cost to employers (and one that is difficult to quantify) results from the higher settlements paid to avoid the perceived unpredictability of juries. Many employers have responded by abandoning the courts in favor of arbitration. Has this benefited employers? It’s hard to say. Arbitration is private; no reliable reports exist about the frequency of claims, win-loss experience, size of awards, success with judicial review and so on. One large, essentially unreviewable award could wipe out many years’ worth of anticipated savings in litigation costs. In a reported case two years ago, an arbitrator gave two employees $2.4 million for age discrimination. Clearly, arbitration was not a panacea for that employer, who had no avenue of appeal. Opponents of mandatory arbitration also cite increasingly courtlike procedures, leading to increasingly litigation-like expense, as an additional objection. Anecdotal evidence suggests that lowering the cost and risk of making claims has the predictable effect of generating more claims. There is an alternative to arbitration. Courts are not the employer’s problem; juries are. Mandatory arbitration is not a satisfactory remedy for the jury-trial problem. Employees probably will never accept mandatory arbitration as fair, and politicians are already up in arms against it. Mandatory prospective jury-trial waivers present far fewer grounds for legitimate objection. Employees are not barred from access to the courts. Judges, unlike arbitrators, are public officials, are compensated from public funds and are accountable to the public. Nonjury trials take less time, cost less and are easier to schedule than jury trials. Employees have the full range of techniques available to all litigants to obtain information from the employer, to protect themselves from improper investigative efforts by employers, to require the attendance of witnesses and to shield themselves and their witnesses from retaliation by the employer. Appeal is possible from a biased or incorrect decision by the judge. And the full weight of the law is at the ready to enforce a favorable decision. BENEFITS SWING BOTH WAYS Employers benefit from jury waivers as well, and not just by avoiding fact-finders composed largely of their opponents’ peers. They rarely want a jury on claims of their own against employees. As for employees’ claims, the higher barriers to entry to the legal system as compared with arbitration will weed out many. Also, more will fall to summary disposition, rare in arbitration (because it is contrary to arbitrators’ economic interests). When cases do go to trial, experience makes judges capable and often highly skilled fact-finders. They must explain their decisions, which can be appealed effectively. A judge’s track record when deciding employment cases is transparent, unlike that of most arbitrators. That means greater predictability. Proponents of arbitration may argue that jury waivers do not offer several key features: privacy, a defense against class and collective actions, speed and finality of decisions. But an employee determined to publicize an arbitration dispute usually can find a way, and the second objection is met by including in the waiver relinquishment of the right to participate in class or collective actions, which, like a jury trial, is a waivable procedural right. Arbitrations are often no speedier than proceedings in court, especially now that the validity of the arbitration agreement may turn on whether the employee is afforded courtlike procedures before and during the hearing. Arbitration decisions have the benefit of greater finality, but appeals generally cost far less than trials, and offer valuable protection against seriously incorrect outcomes. Courts in virtually all jurisdictions enforce contractual jury-trial waivers. Public policy does not favor nonjury trials in the way that it favors arbitration. But with waivers, employees are not denied access to the courts. From 1965 to 1991, Congress entrusted the adjudication of rights under Title VII of the Civil Rights Act of 1964 exclusively to judges. So the case should be hard to make that conditioning employment on an employee’s agreement to the same regime today violates any legal or ethical norm. Stephen F. Fink is a partner at Dallas’ Thompson & Knight ( www.tklaw.com). He practices labor and employment law, representing employers. If you are interested in submitting an article to law.com, please click herefor our submission guidelines.

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