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To Fight or Not

June 07, 2017

What is the difference between arbitration and mediation and why might they be useful in an employment law dispute?  Both can be part of an employment contract, but the role of the arbitrator and mediator are vastly different.

An arbitrator is a fact finder who presides over a non-court hearing (called an arbitration), listens to the evidence and testimony, reviews the law, and renders a decision regarding the merits of the dispute.  Binding arbitration requires that the parties abide by that decision.  Nonbinding arbitration is a recommendation only.

A mediator is a third party neutral who assists the parties in fashioning a solution but has no power to impose an outcome on the parties.  The mediator's effectiveness lies in her ability to provide a neutral assessment to the parties and to help them assess the risks and advantages of settling versus going forward to litigation. 

When reviewing an employment contract, be mindful of whether it contains an arbitration or mediation clause.  Similarly, before heading to litigation, consider the pros and cons of mediating or arbitrating your dispute.  When parties choose to place a dispute in litigation, they lose control of the outcome.  Mediation and arbitration can give you back that control and/or contain costs.