Did You Know Arbitrators Are Usually Men and Are Overwhelmingly White?
Not only are minorities and women more likely than white men to be forced into arbitration; arbitrators working on these cases are mostly male and overwhelmingly white. This is according to research gathered by the American Association for Justice.
Consider the makeup of the two largest consumer arbitration providers in the U.S., American Arbitration Association (AAA) and JAMS (formerly known as Judicial Arbitration and Mediation Services, Inc.) – 88 percent of arbitrators from these organizations are white and 77 percent are men.
In fact, in the 72-year history of the National Academy of Arbitrators, there have been just 35 arbitrators who were either black, indigenous or other people of color (BIPOC). That is just two percent of overall membership in the organization. For comparison, nearly 40 percent of the U.S. population is composed of BIPOC individuals. Women also make up 51 percent of the U.S. population.
In other words, for minorities and women, forced arbitration ensures their case will be decided by a white man. It is hard enough for consumers to win monetary awards in arbitration; being Black or female decreases their odds even further.
For example, a Black Tesla employee was forced into arbitration after he reported at least 12 instances of other employees making threats and using racial slurs. There was even a video of coworkers threatening this person and using the n-word. However, a white arbitrator said the slurs were not racist because they were like lyrics and images commonly used in rap songs.
Female arbitrators tend to award more compensation than male arbitrators. The top 10 male arbitrators used by the AAA had a win rate of 2.1 percent, which means employees received compensation just 2.1 percent of the time. However, the top 10 female arbitrators had a 3.4 percent win rate. The median award from the top 10 female arbitrators was $100,000, while it was just $53,473 for the top 10 male arbitrators.
Why Women and Minorities Are Often Subjected to Forced Arbitration
Employees in certain fields are much more likely to be subject to forced arbitration. Unfortunately, women and minorities often predominate in these fields.
For example, the education and industries have predominantly female workforces and the highest rate of forced arbitration. Meanwhile, construction has a predominantly male workforce and has one of the lowest rates of forced arbitration.
Income also plays a factor in whether employees are more likely to be subject to forced arbitration. Lower-paid workers are much more likely to be subject to forced arbitration than highly-paid employees. Black men earn just 87 cents for every dollar white men earn. Women receive just 82 cents on the dollar compared to men.
Research has found that 65 percent of workers who earn less than $13 per hour are subject to forced arbitration. Just 48 percent of workers who earn between $17 and $22.49 per hour are subject to forced arbitration.
It is difficult for people to trust the arbitration system if it does not reflect the diversity of American society.
Female and Minority Arbitrators Do Not Get Hired
One of the biggest obstacles to greater diversity is that female and minority arbitrators do not get hired. Companies have the option of striking arbitrators when they consider a panel of potential arbitrators. Unfortunately, female and minority arbitrators are often the ones who get struck.
Arbitration organizations also overlook female and minority candidates. For example, a female arbitrator with a master’s degree in dispute resolution and an active legal practice got passed over by the AAA in favor of her husband, who had no experience or legal practice. The AAA said the reason was because the female arbitrator was not expected to generate much business.
The arbitrator complained and was told the AAA construction panel did not put Blacks on the panel because they never got hired.