Arbitration, a form of "alternative dispute resolution" (that is, a way to resolve a disagreement outside of court), is an available tool to resolve workers' compensation disputes in many states. Many states now offer either arbitration or mediation as a means to resolve workers' compensation disputes.
Michigan, for example, allows parties to agree to use arbitration to resolve any workers' comp dispute. The parties must voluntarily agree to use an arbitrator, and must choose an independent arbitrator.
However, arbitration and mediation are rarely binding in workers' compensation. With few exceptions, if the arbitrator rules in your employer's favor, you will be able to appeal the decision to another administrative body or the state court system.
Arbitration is a formal process during which both parties present their arguments and evidence to an arbitrator (who acts like a judge). Sometimes a panel of arbitrators is used; in workers' compensation cases, there is typically only one arbitrator. Once the arbitrator hears all the evidence, the arbitrator will issue a decision regarding the recommended outcome of the dispute. (Read about when an employer might dispute a workers' comp claim.) In most states, the arbitrator's determination is merely a recommendation as to how the matter should be resolved; it is not binding on the parties.
Some states's workers' comp rules require the parties to go through alternative dispute resolution, such as arbitration. Other states permit arbitration if the parties request it.
If you are in a state that has binding arbitration, the arbitrator's workers' comp decision is final and cannot be appealed further. However, it is more likely that you are in a state in which arbitration is not binding for workers' comp cases, and you have the right to appeal the arbitrator's decision or otherwise continue the litigation process.
If you choose to appeal the arbitrator's decision, where your case goes depends on the state you are in. In some states, there is an appellate body within the state agency responsible for administering the workers' compensation system. In other states, your appeal will go directly to the state courts.
Choosing to appeal an arbitration decision means that your case continues forward in litigation. You may want to consult an attorney to determining your chances of success on appeal. You should also consider the emotional and financial implications involved in continuing the litigation.
There are strict deadlines for appealing from arbitration, and you want to make sure you do not lose your right to appeal, so if you do not have a workers' comp lawyer, try to consult with one immediately upon receiving the arbitrator's decision.