How does arbitration work?
Each side has approximately 50 minutes to present their case to a panel of three arbitrators. One of the arbitrators serves as the chairperson and rules on the admissibility of evidence. It is treated like a mini-trial. There are opening and closing statements and the rules of evidence apply. The arbitration panel will issue a written decision (on a form authorized by the Supreme Court) that same day.
A. Arbitration is similar to a trial, except instead of a judge and jury you get a panel of one to three arbitrators which acts as both judge and jury. They hear and weigh the arguments and evidence of both sides of a case, then render a binding decision. The arbitrators generally include at least one “industry” insider and two people from outside the industry. The panel may include accountants, attorneys, sales representatives, bankers, educators, retired judges and other professionals. Unlike court proceedings, arbitration usually doesn’t involve depositions, motions, or appeals. It’s usually much faster and cheaper than civil court. The average length of time is 12 months from filing to first hearing, versus more than two years in state or federal court. The arbitration process is explained in detail at the Securities Law website.
Once a team and a player have agreed to go to arbitration, each of them submits a salary figure for a one-year contract. The team and the player appear before a licensed member of the National Association of Arbitrators. Each side presents a case intended to convince the arbitrator that their salary figure is most appropriate. In general, this is done by demonstrating that the player is “comparable” to players receiving the amount of money being argued for. The choice of how to define “comparable” is often the difference in the cases. After the arbitrator has heard both cases, he chooses one of the two submitted figures as being the most appropriate. The player and team are bound to sign a contract for the next year at that figure. The arbitrator cannot choose any figure other than one of the two submitted. This information is subject to change whenever the Basic Agreement between the players and the owners is renegotiated.
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