If You Happen To Prevail In Arbitration, Get Ready To Lose On Appeal

Arbitration is even worse than we thought. We already knew that consumers lost 94% of the extra-judicial proceedings, but new data shows that the few who manage prevail are likely to have their wins overturned on appeal.

The new data applies to workplace arbitration, which is generally the same bucket of fail as consumer arbitration.

LeRoy examines a “snowballing futility for employees” who are forced into arbitration. If they manage to win, despite the built-in institutional bias, the employer can take it to state court and get the award overturned, forcing the employee to start over from scratch. On the other hand, if they lose, the courts are highly unlikely to disturb the decision.

From the study:

Remarkably, state appellate courts confirmed only 56.4 percent of employee wins in arbitration. But when the same courts ruled on employer victories, they confirmed 86.7 percent of awards.

Just one of many reasons to support the Arbitration Fairness Act.

The “Snowballing Futility” of Arbitration for Employees [Consumer Law & Policy Blog]
Write Your Senator
Write Your Representative
PREVIOUSLY: How To Write To Congress
(Photo: Getty)


Edit Your Comment

  1. kittenfoo says:

    maybe it’s the rainy sunday where i live, but that picture is about to make me cry …

  2. Silversmok3 says:

    That pic is depessing. Like binding arbitration itself.

  3. MustyBuckets says:

    @kittenfoo: Don’t worry, no actual stuffed animals were harmed in the making of the photo.

  4. humphrmi says:

    Would the Arbitration Fairness Act apply to employer / employee situations? I remember it saying “No predispute arbitration agreement shall be valid or enforceable if it requires arbitration of a consumer dispute.”

  5. Mary had a little lamb…

    who was binded in shackles, beaten by the judicial system, and hung in solitary while a ruthless photographer took a picture of the horror….

    Oh, the horror….

  6. WingZero987 says:

    Arbitration is evil and any reasonable person can understand why the system is flawed. Go WI and Senator Feingold! People like to talk trash about WI, but we have just about the only senator that isn’t a complete embarrassment.

  7. joellevand says:

    @kittenfoo: Me too! It’s possibly one of the saddest photos ever. :(

  8. thirdbase says:

    Great photo love it

  9. CumaeanSibyl says:


  10. Buran says:

    Wait a minute. Isn’t it mandatory BINDING arbitration? I thought there was no appeal.

  11. JNighthawk says:

    @Buran: There’s no appeal within the arbitration process. This is talking about after arbitration was finished and appealing it in court.

  12. TexasBelle says:

    Statistics like these don’t mean much unless you know what the merits of the individual cases were in the first place. I would hold off on letting my panties get in too big of a wad.

  13. shikkaba says:

    Okay, wait a second. This doesn’t make sense. [cbs4.com]

    I was on that cruise when it was struck by the virus. They DID NOT kick anyone off. They just took major preventative measures. MAJOR measures. That’s it. No kicking off. People were quarantined for the entire cruise if they had it, which must’ve really sucked for them…

    I didn’t get sick, btw.

    Are they kicking people off because of what happened on Liberty of the Seas?

  14. shikkaba says:

    @shikkaba: uh… can someone take that off? It was for the wrong article…

  15. Mr. Cynical says:

    I got fucked in arbitration, too. A moving company who had provided forged documents to Chase (my bank) STILL ended up ruling in favor of the movers.

  16. FilthyHarry says:

    Ok, I’m stumped. I thought the whole idea of arbitration was that both sides were bound to the decision? You can appeal arbitration? Makes the whole thing kinda pointless then doesn’t it?

  17. Dobernala says:

    @Mr. Cynical: How did that happen? Did the just release a summary judgment without giving an explanation? I don’t see how a judge could weasel that unless it was some technicality.

  18. Buran says:

    @JNighthawk: I understood that. But I also understood binding arbitration to mean that there is no suing. You don’t have the right to sue if you’re in an MBA agreement. If you try (and such stories have been mentioned on this site before) the judge throws it out and remands you back into the arbitration system because you signed away your right to sue.

    So, again, what the hell?

  19. WraithSama says:

    Yeah, I was basically wondering the same thing myself.

    I recall the Consumerist berating MBA agreements before in part due to the notion that there is no grounds for appeal.

  20. Concerned_Citizen says:

    If you are able to win via a very bias arbitration court, how can there be lack of evidence or anything lacking that causes you to lose in a state court? Sounds like a case of corrupt judges.

  21. JollyJumjuck says:

    Apparently the only way one can get justice when arbitration is concerned, is vigilante justice.

  22. doctor_cos wants you to remain calm says:

    Actually, one of the comments to the article cited above as a source questions the method whereby the quoted statistics were generated.
    Although it was probably written by another lawyer!

  23. doctor_cos wants you to remain calm says:

    Perhaps like counting sunny days by going outside, but days you don’t go outside (because it’s cloudy) don’t count. So every day you go outside, it’s sunny!!!

    That’ll be $250 for the consult, kthxbai.

  24. esqdork says:

    I think arbitration is very bad for consumers. That said, most arbitration clauses are binding and judicial appeals only work if the arbitration panel COMPLETELY goes off the reservation–that’s the legal standard in most states.

  25. Pro-Pain says:

    @Jolly Jumjuck – I totally agree. Stick a gun in their face and see if they agree with their decision to screw you THEN. Sweet! If only in were that easy…*sigh*

  26. Buran says:

    @WraithSama: And, since it’s BINDING, NEITHER party can sue.

  27. Tor says:

    You can appeal an arbitration ruling, but at least in the employment context, it is very very difficult to prevail. You basically have to establish that the arbitrator totally disregarded either (or both) the facts or the law at issue. It is a VERY high standard, and rarely succeeds. The stats mentioned above for employment arbitration are *wrong*.

    For one thing, arbitrators don’t like to be overturned on appeal, so they write their decisions to be appeal-proof. For example, how do you prove that someone totally disregarded the law, when they base their decision on the facts? And if they credit at least some of the testimony of each side’s witnesses, you can’t really establish that the arbitrator disregarded the facts.

    I believe that consumer arbitration could be as bad as described, but employment arbitration is fairly equitable, although there are cases on both sides where the arbitrator screwed up…