Is arbitration still cost-effective? | Katz Melinger PLLC
Katz Melinger PLLC
Free Initial Phone Consultation
Menu Contact
Free Initial Phone Consultation
Proactive. Pragmatic.
Committed To Obtaining Results.

Is arbitration still cost-effective?


For years, arbitration has been a crucial cost-saving measure for handling worker disputes. Employers have long preferred arbitration to the much more costly alternative of litigation. However, now, many plaintiffs and their lawyers are filing so many arbitration claims that it is overwhelming the system and jeopardizing the cost-saving nature of arbitration.

According to a recent report, the food delivery service DoorDash received around 6,000 arbitration claims by its employees in just one summer and was left with a bill for over $9 million. The company didn't make the payment, arguing that they couldn't verify that all the claims were legitimately coming from its delivery drivers. DoorDash's refusal to pay the bill essentially closed the active cases for the time being. However, in February, a federal judge in San Francisco ordered DoorDash to proceed with the arbitration cases and pay the fees. Other companies are facing similar issues.

New tactics could create a legal battleground for employers

Although employers once relished the idea of settling disputes out of court, they are now being forced to reconsider the benefits. It typically costs businesses $1,500 to start the arbitration process. On top of that, businesses could end up spending tens of thousands more on each arbitration case. If companies deal with too many claims at once, it can hurt their profit margins in the long-run. Because of this new development, many are looking at different approaches to protect themselves against these aggressive tactics. Some of those strategies include:

· Refusing to pay arbitration fees;

· Challenging the arbitration proceedings; and

· Generally prolonging the process, hoping employees will eventually drop out

However, such strategies have been largely unsuccessful so far, and alternate approaches are likely necessary.

Could this change the future of business litigation?

Many businesses are feeling the shock and disillusion mass arbitration can cause. As the system they've used for years seems to be hurting more than helping them, some may want to look for alternative solutions to settling disputes. If that's the case, they could benefit from the assistance of a trusted legal partner.

No Comments

Leave a comment
Comment Information
Email Us For A Response

Schedule Your Consultation Today

To begin protecting your legal rights and financial interests, schedule an initial consultation. We clearly communicate your legal options in an honest manner.

Contact Katz Melinger PLLC at 212-460-0047 or reach us by filling out the form below.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Office Address

Katz Melinger PLLC
280 Madison Avenue
Suite 600
New York, NY 10016

Phone: 212-460-0047
Fax: 212-428-6811
New York Law Office Map

Review Us

Can we help you find a topic?