The Ramifications of the Gilmer Decision for Firm Profitability

22 Pages Posted: 5 Apr 2001

See all articles by Steven E. Abraham

Steven E. Abraham

State University of New York at Oswego - School of Business

Paula B. Voos

Rutgers, The State University of New Jersey - Labor Program

Abstract

The impact of Gilmer v. Interstate/Johnson Lane Corp., was assessed by examining the effect of the decision on shareholder returns in two samples of firms. Shareholder returns of securities firms rose between 5% and 6% in response to the decision, indicating that firms in the securities industry benefited substantially from being able to require that their employees arbitrate all employment related disputes. The results were less clear in a sample of firms in financial services industries. This indicates that the effects of Gilmer on the nonunion sector in general are more ambiguous.

JEL Classification: J7, K0, K1, K4

Suggested Citation

Abraham, Steven E. and Voos, Paula B., The Ramifications of the Gilmer Decision for Firm Profitability. Available at SSRN: https://ssrn.com/abstract=264517 or http://dx.doi.org/10.2139/ssrn.264517

Steven E. Abraham (Contact Author)

State University of New York at Oswego - School of Business ( email )

316 Rich Hall
Oswego, NY 13126
United States
315-312-3307 (Phone)

HOME PAGE: http://www.oswego.edu/~abraham/

Paula B. Voos

Rutgers, The State University of New Jersey - Labor Program ( email )

50 Labor Center Way
New Brunswick, NJ 08901
United States
732-932-1748 (Phone)
732-932-8677 (Fax)

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