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Limitations on Third-Party Discovery in Arbitration
In recent years, it has become almost a foregone conclusion that a savvy employer seeking to avoid costly litigation with its employees will require those employees to sign agreements that provide for mandatory arbitration of any claims arising out of their employment. However, the decision to submit all employment disputes to mandatory arbitration only should be made after a careful analysis of the pros and cons of arbitration so that the employer can determine whether the perceived benefits of arbitration actually are worth the significant disadvantages.
One perceived benefit of arbitration is that it is assumed to be less expensive than court litigation. This assumption is based in large part on the notion that discovery is limited in arbitration. However, in many cases, the same amount of discovery takes place in arbitration as it does in court litigation, and thus no cost saving is achieved.
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