Arbitration is a form of alternative dispute resolution where a neutral third party, known as an arbitrator, hears both sides of a dispute and makes a binding decision. In the context of employment law, arbitration is often used to resolve conflicts such as wrongful termination, discrimination, or wage disputes. While it can be an efficient way to settle disputes, employees should be aware of the implications of arbitration agreements, which many employers include in employment contracts. Generally, in the employment context, it is most often best to avoid arbitration, if possible, since you give up your right to a trial by a jury of your peers, among other reasons.
What is a Mandatory Arbitration Agreement?
A mandatory arbitration agreement is a clause in an employment contract that requires employees to resolve workplace disputes through arbitration rather than through court litigation. By signing such an agreement, employees waive their right to take their employer to court for most disputes.
Key Features of Arbitration
- Binding Decision: Similar to final ruling in a court of law, the arbitrator’s decision in arbitration is final and enforceable.
- Private Proceedings: Arbitration is a confidential process, which means the details of the dispute are not made public.
- Limited Appeals: There are very few options to appeal an arbitrator’s decision, even if it seems unfair.
Benefits and Drawbacks of Arbitration for Employees
Benefits:
- Quicker Resolution: Arbitration is generally faster than court litigation.
- Lower Costs: Arbitration can be less expensive than a court case, although employees may still incur legal fees.
- Confidentiality: The private nature of arbitration can protect sensitive information.
Drawbacks:
- No Jury: You will not get a jury of your peers deciding your case, instead a legal professional and retired judge will decide your case and they are typical more conservative in their decisions.
- Limited Recourse: Employees have fewer options to appeal or challenge an unfair decision.
- Potential Bias: Arbitration firms may have ongoing relationships with employers, leading to perceptions of bias.
- Waiver of Rights: By agreeing to arbitration, employees forgo their right to a jury trial and certain procedural protections available in court.
What Employees Should Do
If you suspect you have signed a mandatory arbitration agreement, take the following steps:
- Review Your Employment Agreements: Look for clauses mentioning arbitration and understand their scope and terms. If you can opt out, seriously consider doing so.
- Seek Legal Advice: If you have a dispute with your employer, consult an employment attorney to evaluate the enforceability of the arbitration agreement and your rights under it. An experienced attorney can help you strategize potential loopholes to avoid arbitration.
- Prepare for Arbitration: If a dispute arises, your attorney will guide you in gathering evidence and presenting a strong case to the arbitrator.
Are Arbitration Agreements Always Enforceable?
Not all arbitration agreements are enforceable. Courts may invalidate an agreement if it:
- Is Unconscionable: For example, if it overly favors the employer or imposes excessive costs on the employee.
- Violates Public Policy: Some state laws limit the enforceability of arbitration agreements in specific circumstances, such as sexual harassment claims.
- Lacks Mutual Consent: Agreements signed under duress or without proper understanding may be challenged.
- Conflicts With Other Contractual Provisions: Having an attorney review relevant agreements or documentation can help you evaluate the enforceability of an arbitration agreement.
How We Can Help
Arbitration can feel intimidating, especially if you are unfamiliar with the process or unsure of your rights. Our firm is dedicated to protecting employees and ensuring fairness in the workplace. We can:
- Help you understand the terms and implications of your arbitration agreement.
- Represent you during the arbitration process to advocate for your interests.
- Challenge unfair arbitration agreements or outcomes when possible.
Contact us today to learn more about arbitration and how we can assist you in navigating this complex area of employment law.
