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ADR Part 1: Mediation vs. Arbitration: The Difference is in the Details

Alternative Dispute Resolution (“ADR“) can take many forms, but the most common in employment disputes are Mediation and Arbitration. Arbitration is typically a binding process, and it replaces the entirety of the traditional trial, with the arbitrator acting as the only judge or trier of fact. In contrast, mediation is typically non-binding, where a third-party neutral mediator will assist the disputing parties in attempting to reach a resolution. However, the parties maintain control over whether or not settlement occurs. If it does occur, the parties can memorialize the settlement in writing, which does become binding.

One major benefit to mediation is the confidential nature of the proceedings. Under the California Code of Civil Procedure, anything said for the purpose of mediation is not admissible in arbitration or a civil action and is not subject to discovery. Similarly, any writings prepared for mediation or settlement discussions had during a mediation are inadmissible in arbitration and court and are confidential.

While mediation can occur both before arbitration or traditional litigation, employers are often thought to benefit more greatly from arbitration, and as such frequently want arbitration agreements with their employees. One reason for this is to avoid class actions and obtain a class waiver in your agreement. Another major benefit is the somewhat loose nature of admissible evidence. While traditional court proceedings adhere to strict rules of evidence, in arbitration, nearly everything is admissible. The arbitrator will receive information about anything that the parties wish to share, and will in turn evaluate its weight, as opposed to its admissibility. 

As mentioned above, arbitration is final. There are only very narrow circumstances in which an arbitrator’s decision can be vacated. Arbitrators have historically been viewed as more favorable to employers because they are not as easily swayed as juries into large awards for damages. Additionally, arbitration is private and the filings within the arbitration are confidential, giving employers the opportunity to avoid damage to their public perception. Unless the award has to be enforced by the Court, they remain confidential. There are costs and benefits associated with mediation and arbitration, and whether to engage in one or both methods of ADR is a complicated and case-specific analysis. The Employer Lawyers at Chauvel & Glatt are well-versed in assisting in employers with these analyses. To learn more about whether or not arbitration or mediation is right for your business or to ensure that your arbitration agreements are legally compliant, contact us by calling 650-573-9500.

This material in this article, provided by Chauvel & Glatt, is designed to provide informative and current information as of the date of the post. It should not be considered, nor is it intended to constitute legal advice.  For information on your particular circumstances, please contact  Chauvel & Glatt at 650-573-9500 for legal assistance near you. (Photo Credit depositphoto.com.)


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