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

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.