Beyond Repeat Players: Experience and Employment Arbitration Outcomes in the Securities Industry

• Published in: Managing and Resolving Workplace Conflict Vol. 22; pp. 135 - 160
• Main Author: Lamare, J. Ryan
• Format: Book Chapter
• Language: English
• Published: United Kingdom Emerald Group Publishing Limited 01.01.2016; Emerald Publishing Limited
• Subjects: HR & Organizational Behaviour; Industrial relations; Industrial/Labour Relations; repeat player effects; hybrid-effects model; securities industry; FINRA; Employment arbitration
• ISBN: 9781786350602; 1786350602
• ISSN: 0742-6186
• DOI: 10.1108/S0742-618620160000022006

Abstract Purpose This chapter analyzes the extent to which more experienced employers, arbitrators, and attorneys fare better in securities industry arbitration. Although studies into experience have identified a so-called repeat-player effect on outcomes, I argue that more nuanced considerations of experience are required. Methodology/approach I empirically analyze all employment arbitration awards from the securities system’s inception through 2008. I separate experience into two categories (between- and within-group effects) and run hybrid random- and fixed-effects regressions modeling increasing employer, attorney, and arbitrator experience on arbitration outcomes. Findings I find that between-group experience affects awards but that within-group experience is nonsignificant, except in civil rights cases. This implies that so-called repeat players gain an advantage over inexperienced players due to their entity-specific characteristics, not necessarily by learning to use the system to their advantage. I conclude that, although the securities arbitration system suffers from power imbalances, there is little evidence of systemic exploitation by firms. Originality/value Prior studies into employment arbitration are limited both by their definitions of experience and by their methodological approaches. I overcome these issues by employing a novel methodological approach to measure between- and within-entity experience, which adds a more multifaceted and nuanced framework to the literature than the common repeat-player versus single-player dichotomy.