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36
STRATEGY

How Companies Use Arbitration
 

Benchmark chart illustrating how arbitration can be a cost-effective way to stay out of court.
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Arbitration, a form of alternative dispute resolution, can be a cost-effective way to avoid lengthy court battles. Only 7.5% of approximately 250 nonunion companies recently surveyed said they use arbitration to settle employment disputes, but 64% of that 7.5% said that arbitration had reduced annual litigation costs. Here are some statistics on the companies that use arbitration:

52.9% Use binding arbitration

30% Use nonbinding arbitration

17.6% Use both binding and nonbinding arbitration

33.3% Solicit employees' input to design the arbitration system

50% Provide employees with the choice of an arbitrator

40% Pay employees for attorneys' fees

50% Allow employees to be represented by coworkers

21.4% Provide damages

Source: Society for Human Resource Management, Alexandria, Va., 1994.

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Last updated: May 1, 1995

DONNA FENN is the author of Upstarts! How Gen-Y Entrepreneurs Are Rocking the World of Business and 8 Ways You Can Profit From Their Success, an exploration of the ways Gen Y is changing the entrepreneurial landscape.
@donnafenn




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