Arbitration and Mediation Agreements

Rob Wiley: My name is Rob Wiley and today I'm talking with Austin employment lawyer, Colin Walsh, about arbitration. So Colin, more and more we're seeing employees who are signing arbitration agreements or where their handbook says they're going to be subject to arbitration agreements. What are arbitration agreements, what is that?

Colin Walsh: It's a private dispute resolution process where both parties agree to take their claim out of the courts and go to a private arbitrator that is usually paid for by the employer.

Rob Wiley: All right, it's basically like a trial but without a judge and without a jury and instead an arbitrator who's kind of like a judge.

Colin Walsh: Yes, that, that's exactly right. It's like a mini private trial.

Rob Wiley: Is that enforceable, I mean, can you give up your right to a jury?

Colin Walsh: Yes, you can. Arbitration agreements are largely found to be enforceable.

Rob Wiley: Are there advantages to being in arbitration over the general litigation process?

Colin Walsh: There are a couple of advantages. The main one, I would say, is finality. It does allow you to present your claim and to have somebody evaluate the merits of your claim and decide whether or not something happened, and I think that is a big benefit of arbitration.

Rob Wiley: I think there's another advantage to arbitration for an employee and that is about costs, and so if an employee is in arbitration, who's paying the arbitrator, whose pocket does that money come out of?

Colin Walsh: Fairly that comes from the employer. The employer is usually going to be required to pay the arbitrator and that can be advantageous to employees with arbitration agreements because what that means is that the employer's not only paying its attorneys to represent its interests, it's also paying the arbitrator, and if you win, its going to probably have to pay your attorney's fees.

Rob Wiley: Now, what is the difference between arbitration and mediation?

Colin Walsh: Mediation is much more informal than arbitration and that's where the two parties go and they spend a day or half a day or sometimes even a couple of days trying to work out a resolution. You're not going to get a decision on the merits. What a mediator is going to do, and the real benefit of a mediator, is that a mediator's going to be look at this and see what you want, what the employer wants, and see if you can work out some kind of resolution to that and that's quite different from a mini trial which is arbitration.

Rob Wiley: You know, I think with an arbitrator, what the arbitrator decides that's going to be the decision in the case. Whereas with mediation, the mediator might say I think that this case is worth X amount of dollars, and if the parties agree they can settle their case but if the parties don't, then either of them can get up from the mediation.

Colin Walsh: And I would say another advantage of mediation would be that you can craft your own resolution. So, you could ask for and get relief at mediation that you wouldn't be able to get from an arbitrator under an arbitration agreement.

Rob Wiley: What's your experience overall with mediation in terms of being able to settle cases?

Colin Walsh: I've had very good experience settling cases in mediation and resolving issues in mediation. The vast majority are going to be resolved in mediation because the mediator does go between both rooms trying to work out a solution that would be agreeable to both parties.

Rob Wiley: And I think there's also something to be said for simply getting everybody together in the same place, at the same time, to talk about the potential for settlement. Even cases that sometimes I would never think would settle, I get surprised the employer puts more money on the table then I would have thought or after having sat and really looked at it, the plaintiff in the case might make a business decision to just go ahead and, and reach closure. Thank you Colin.

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