In recent years, it has become common practice for employers to include arbitration clauses in their contracts. Arbitration is a form of alternative dispute resolution that opposing parties must go through instead of filing a lawsuit.
Arbitration agreements typically benefit the employer. According to FindLaw, this is because arbitration agreements protect the employer against any legal action a disgruntled employee wishes to take. If an employee signs an arbitration agreement, he or she forfeits any right to pursue remedies in court. As an employee, it is important that you understand the pros and cons of arbitration before you sign anything.
Pitfalls of arbitration
Most employers include arbitration clauses in their employee contracts because such clauses do tend to favor companies over individuals. If you sign an arbitration clause, you may forfeit your right to a fair trial before a jury of peers. Instead, a neutral third party — the arbitrator — will hear your case and make a decision based on what is fair and just according to the law.
Arbitration also robs you of your chance to present substantial evidence in favor of your case, or to receive evidence that may hurt your employer’s case. On the other hand, because your employer is the employer, it may be able to access all the evidence and information necessary to dispute your claim.
Finally, you cannot appeal arbitration decisions in most cases. When you go through a higher court, the option to appeal is almost always available.
Advantages of arbitration
Arbitration is not all bad. For one, arbitration is much less formal than a typical court trial. This often equates to less money spent in attorney’s fees and less time filing and preparing documents. In fact, many employees find that they do not need to hire an employment attorney at all for the arbitration process.
Arbitration also goes by much more quickly than court trials. Most court trials take, on average, a year or more to settle, whereas arbitration can be over within a matter of months.