What Is Arbitration? What Are the Potential Risks of Using Arbitration to Resolve an Injury Claim?
In Texas, unlike any other state in the country, employers are not required by law to either provide workers’ compensation insurance or qualify to be self-insured. A Texas company can choose not to subscribe to the state’s workers’ compensation system. That doesn’t mean, though, that an injured worker doesn’t have recourse. The worker may sue the employer directly, filing a civil lawsuit for the losses sustained.
What Is Arbitration?
It’s fairly common practice in Texas for employers who don’t subscribe to the state’s workers’ compensation system to require all employees to sign a binding arbitration agreement as a condition of employment. By doing so, the worker waives the right to file a personal injury lawsuit and agrees to have all issues resolved in an arbitration proceeding.
Arbitration is an alternative to the traditional legal process. Instead of a civil trial, with a judge and jury, an arbitration proceeding is conducted by an arbitrator (or, in large or complex cases, an arbitration panel). The arbitrator is often a person with some specialized knowledge of the matters involved in the dispute. The arbitrator in a workplace injury case may be an attorney who has represented either side in personal injury claims or even a former judge who handled personal injury lawsuits.
What Are the Potential Risks to a Worker in the Arbitration Process?
Here’s the first thing to understand about an arbitration proceeding in a workplace injury case—the arbitrators are paid by the company. In theory, because both parties have to approve the panel of arbitrators, the process has a semblance of fairness. However, the list of arbitrators from which to choose is typically provided to the parties by the arbitration company, which is paid by the employer. If the arbitration company wants more business from the employer, it can ensure that the list of potential arbitrators is made up mostly of individuals who have a bias toward the employer. Accordingly, an injured employee may not have a meaningful opportunity to select a fair arbitrator.
In addition, because the arbitration panel is hired and paid by the employer, the employer may opt to terminate either the panel or the services of a particular arbitrator if a ruling is unfavorable. Because arbitrators don’t want that to happen, they tend to favor employers in workers’ compensation proceedings.
Furthermore, while the rules of evidence technically apply in arbitration proceedings, no judge is present to rule on such matters. As a consequence, any potentially inadmissible evidence that favors the employer tends to be heard by the panel.
Because most arbitration proceedings are binding, the injured worker has no opportunity to appeal a ruling against them. While the decision of an arbitration panel can technically be overturned by a court of law, in reality that rarely happens.
Finally, arbitration panels tend to focus on economic damages, those that are easily determined, such as lost wages and unreimbursed medical expenses. Arbitrators spend little time and pay little attention to claims seeking damages for pain and suffering, loss of enjoyment of life, or loss of companionship or consortium.
At the law offices of Bailey & Galyen, we have protected injured workers across Texas for more than four decades, including people who have been hurt while working for companies that do not subscribe to the Texas workers’ compensation system.
We have comprehensive knowledge of the benefits and risks of using binding arbitration to resolve job-related injury claims. We offer a free initial consultation to workers who have suffered any type of injury or illness while in the employ of a non-subscriber company. Contact us by email or call our offices. Our phones are answered 24 hours a day, seven days a week.
