From the abstract:
Purpose: Using an Institutional Theory perspective, we examined employment lawsuits across case type and alternative dispute resolution procedures (negotiation, trial, arbitration).
Design/methodology/approach: We examined actual data from U.S. Federal court lawsuits (N = 98,020). The data included the type of lawsuit, the dispute resolution method used, and the outcome of the lawsuit in terms of the dollar amounts awarded.
Findings: The results show employers winning more in high social context cases (Civil Rights) than in other cases (ERISA). In negotiated settlements, plaintiffs received similar amounts across case types. In trials and arbitrations, outcomes were higher than settlements across case types. In arbitrations, plaintiffs received less in high social context cases (NLRA) than in other (ERISA) cases.
Practical implications: The results show that employers lose more often and in larger dollar amounts in arbitration than in litigation. However, if arbitration rulings more closely matched to the likely outcomes of trials then subsequent litigation would be less likely to be overturned and transaction costs would be reduced. Then the arbitration of employment lawsuits would more closely match the arbitration of contractual grievances under the typical labor relations system where the arbitrator’s decision is usually final and binding. This could be a better outcome for all stakeholders in the dispute resolution process.
Originality/value: This is the first study of its kind to examine actual workplace conflicts that result in employment-related lawsuits from the perspective of social contextual factors.