34 Pages Posted: 19 Nov 2004
In this essay, I argue that employers view mandatory arbitration as a method of controlling the risk of discrimination lawsuits, much like employers view property insurance as a method of controlling the risk associated with a plant fire. Using a risk analysis, the essay reexamines (1) the repeat player effect in arbitration, (2) why employers do so well in the litigation of discrimination disputes, and (3) the adequacy requirement for arbitral forums. In particular, I consider whether mandatory arbitration accounts for the problems of moral hazard and adverse selection endemic to any risk management scheme.
Keywords: mandatory arbitration, pre-dispute arbitration, employment discrimination
JEL Classification: J52, J71, K12
Suggested Citation: Suggested Citation
Baker, Scott, A Risk-Based Approach to Mandatory Arbitration. Oregon Law Review, Forthcoming. Available at SSRN: https://ssrn.com/abstract=622922