By Ty Hyderally, Esq. and Faatimah Jafiq

April 29, 2025

When pursuing a civil lawsuit or an Employment dispute in New York or New Jersey, most people seem to think the only path available is filing a complaint with the courts in either federal or state court.

However, there are other paths available to the employee and the employer known as Alternative Dispute Resolution (ADR).  There are many facilities in New York and New Jersey that offer ADR such JAMS and the American Arbitration Association (“AAA”).  Both agencies offer Mediation or Arbitration as potential conflict resolution options.  These approaches offer both parties the option of avoiding filing a Complaint with the Courts and retaining more control over the matter.  The employee needs to remain cognizant of the Statute of Limitations in considering to pursue ADR as opposed to filing a complaint with federal or state court or a Charge of Discrimination with the State or Federal agency.

Although both mediation and arbitration are alternative methods of resolving disputes, there are significant differences between the two.

Mediation

In mediation, a neutral third party (a mediator) facilitates discussions between parties to help them reach a mutually acceptable solution. The mediator is not there to make a decision or impose a judgment.  However, there are many different types of mediation such as Facilitative Mediation or Evaluative Mediation.  In facilitative mediation, the mediator helps the parties have dialogue and takes a more laid back approach in the mediation.  In an Evaluative Mediation, the mediator is much more involved in sharing with the parties the mediator’s evaluation of the strengths and weaknesses of the case and the mediator’s thoughts on the vulnerabilities in the case and is very involved in discussing what the case should settle for.  Facilitative Mediators are much more focused on communicating the other side’s position to one another and allowing the parties to decide what money to offer or take. In both situations, the parties retain full control over the outcome of the mediation. The mediator listens to parties individually, then conveys their decisions, questions, concerns, and settlement offers to the other parties.

Mediation is effective for preserving relationships and finding a common ground because it requires a significant amount of collaboration, communication, and compromise. However, the most attractive facet of mediation is that the outcome is not binding upon the parties. Thus, if the parties go through a mediation and find that the proposed resolution is unacceptable to them, they are not obligated to accept it.

Arbitration

By contrast, Arbitration is a much more formal process. In an Arbitration, you actually file a Statement of Claim which may look very much like a Complaint.  In the Statement of Claim you state the facts supporting the causes of action and set forth the legal causes of action.  You then get assigned an Arbitrator to preside over the matter. There are many different types of Arbitration and you generally have either one (1) or three (3) arbitrators presiding.

Prior to going to arbitration, the parties can take depositions and exchange what is known as discovery.  It looks very much like a lawsuit filed with the Courts except you can get quicker rulings by someone designated to preside over the matter.  The number of depositions you are able to take might be constrained as well as the discovery you can get.  Once you are done with the discovery process, you generally go to a hearing.  An arbitrator listens to testimonial evidence and receives documentary evidence and hears arguments from both parties.  After this, the Arbitrator issues a binding decision. The arbitrator in some ways operates as a “private” judge. Arbitration is typically a faster process than a court trial (and possibly less expensive).  However, arbitration is a much longer path to get to resolution than mediation.

In New Jersey, arbitration is mandatory in certain cases, for example, those involving automobile negligence or personal injury.[1] In contracts, arbitration clauses must be clear and explicit.[2]  In employment matters, arbitration is not statutorily mandatory.

So Who Wins?

Due to the flexibility and collaborative nature of mediation, it is generally the preferred option for resolving disputes over arbitration. Mediation allows the parties involved to creatively address solutions tailored to their unique circumstances rather than relying on a third-party to make binding decisions. But at the end of the day, it very much depends on the interests of the Employee and the Employer.

If you have any questions regarding your rights as an employee, you should seek out an experienced attorney who concentrates in employment law. Our firm has been concentrating in employment law for over twenty-two (22) years!

En nuestra firma hablamos español. This blog is for informational purposes only. It does not constitute legal advice and may not reasonably be relied upon as such. If you face a legal issue, you should consult a qualified attorney for independent legal advice regarding your particular set of facts. This blog may constitute attorney advertising. This blog is not intended to communicate with anyone in a state or other jurisdiction where such a blog may fail to comply with all laws and ethical rules of that state or jurisdiction.

[1] https://legalclarity.org/new-jersey-arbitration-act-key-rules-and-legal-requirements/

[2] As established in Atalese v. U.S. Legal Services Group, which protects individuals from inadvertently waiving their rights to litigation.