Why Sexy Citibank Ex-Employee Can't Sue

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Arbitration long has been the norm for how brokers resolve disputes over trades. But in 1991, then-brokerage firm Interstate/Johnson Lane argued that mandatory arbitration policies for brokers extended to claims of age discrimination and that a broker who had sued the firm for age discrimination had to take his case to arbitration.

The Supreme Court agreed.

It was "a watershed" moment, said David Sherwyn, an associate law professor at Cornell University's School of Hotel Administration who specializes in employment arbitration. "Employers said, 'Wow, we can do this.' "

Sherwyn, an arbitration supporter, said that while employment discrimination court cases often last years and can cost half a million dollars or more in legal fees, arbitration proceedings can be concluded in a matter of months for a fraction of that amount.

For employees, he said, arbitration may be a better alternative because while large corporations can often afford to keep paying their lawyers to sustain long-brewing legal battles, employees often can't.

"Huge megafirms -- they can beat the crap out of you and keep you going forever," he said. Under arbitration, "they can't big-firm you to death."

Less Media Attention for Arbitration

Then there are the employees who can't afford lawyers at all or can't find a lawyer to take their cases. For them, arbitration is the only option.

"Advocates of arbitration say some justice is better than no justice," said Lisa Blomgren Bingham, a professor who studies arbitration at the Indiana University of School of Public and Environmental Affairs.

But Blomgren Bingham, who considers herself neither an opponent nor proponent of arbitration, said there are questions over whether the public suffers when a dispute is decided in private arbitration proceedings rather than in a public courtroom.

The former tends to draw far less publicity than the latter -- a boon, Sherwyn said, to any corporation that wants to avoid airing "dirty laundry" before a courtroom full of reporters and members of the public.

But Blomgren Bingham said arbitration scholars often will cite the landmark 1954 Supreme Court Case of Brown v. the Board of Education, in which the court declared racial segregation at public schools unconstitutional, as a reason why a lack of publicity is dangerous.

"What if Brown v. Board of Education had gone to arbitration? We wouldn't know about it," she said. "It might have covered one school district if the proponents of desegregation won but it certainly wouldn't have set a national precedent. It wouldn't have set any kind of precedent at all."

Aside from issues of legal precedent, there is also -- more importantly, for some -- the issue of final monetary awards.

Lorenzana's lawyer, Tuckner, and others believe that a jury would award more cash for damages than an arbitrator.

But Sherwyn and Blomgren Bingham agree that it's difficult to reach an overarching conclusion on who is likely to give bigger awards because each case is unique and hard to compare to any other. How do you, for instance, compare the results of a weak employment claim that went to arbitration and a strong employment claim that went to court?

"At the end of the day, we put all the stuff together and we try to judge wins, losses and awards, but there are always different cases," Sherwyn said.

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