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93 Minn. L. Rev. Headnotes 1 (2009)

handle is hein.journals/headnotpan93 and id is 1 raw text is: Response Article

A Better Solution to Moral Hazard in
Employment Arbitration: It Is Time to Ban
Predispute Binding Arbitration Clauses
Lisa Blomgren Binghamt and David Henning
Good*
Mandatory arbitration is a neologism that describes the
capacity of an economically stronger repeat player to impose an
adhesive binding arbitration clause on the weaker, usually one-
shot, player. Such agreements appear frequently as a condition
of some economic relationship, most problematically employ-
ment, consumer purchases, or health care.' Employers and
businesses adopt adhesive arbitration clauses as a means to
manage the risk of litigation and perceived runaway jury
awards.2 Professor Michael LeRoy, together with his colleague
Professor Peter Feuille, has made a series of important empiri-
cal and substantive contributions to the dialogue and contro-
versy.3 In his recent article appearing in the Minnesota Law
t Keller-Runden Professor of Public Service, Indiana University School
of Public and Environmental Affairs, Bloomington, Indiana.
t Associate Professor of Public and Environmental Affairs and Director
of the Transportation Research Center, Indiana University School of Public
and Environmental Affairs, Bloomington, Indiana. Copyright © 2009 by Lisa
Blomgren Bingham and David Henning Good.
1. For reviews of the literature, see Michael H. LeRoy, Do Courts Create
Moral Hazard?: When Judges Nullify Employer Liability in Arbitrations, 93
MINN. L. REV. 998, 1001 n.13 (2009).
2. Lisa B. Bingham, Control Over Dispute-System Design and Mandatory
Commercial Arbitration, LAW & CONTEMP. PROBS., Winter/Spring 2004, at
221, 221-23 (arguing that repeat players that control the design of arbitration
systems manage risk by shifting transaction costs to the one-shot player to re-
duce the settlement value of a case and discourage litigation).
3. Michael H. LeRoy, Getting Nothing for Something. Vhen Women Pre-
vail in Employment Arbitration Awards, 16 STAN. L. & POL'Y REV. 573, 573-
81 (2005); Michael H. LeRoy, Jury Revival or Jury Reviled? When Employees
Are Compelled to Waive Jury Trials, 7 U. PA. J. LAB. & EMP. L. 767, 767-72
(2005); Michael H. LeRoy, Misguided Fairness? Regulating Arbitration by Sta-
tute: Empirical Evidence of Declining Award Finality, 83 NOTRE DAME L. REV.

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