Employee Rights and Employment Policy Journal

 The impact of Gilmer v. Interstate/Johnson Lane Corp., on profitability was assessed by examining how shareholder returns changed in response to the decision.  Shareholder returns for securities firms rose between 1 percent and 4 percent, indicating these firms benefited from being able to require that their employees arbitrate all employment related disputes.  The impact was greater in circuits where the law changed than where it did not; results were clearer for securities firms than for non-securities financial service companies.  Compulsory arbitration systems are likely to spread if they are permitted by law.