Arbitration and Employment Law

Arbitration is a dispute resolution strategy commonly used by employers. Arbitration agreements require an employee to seek legal remediation for employment disputes through arbitration rather than filing a lawsuit. Whether it is a wrongful termination, breach of contract, or discrimination case, if you have signed an arbitration agreement you have forfeited your right to sue and must instead pursue your legal complaint through arbitration.

Advantages and disadvantages of Arbitration

Arbitration allows an arbitrator to hear the evidence for the employment claim and make a binding decision for the case. Opponents of the arbitration process argue that arbitration can put the employee at a disadvantage because certain types of information may not be presented. The decision made through arbitration also cannot be appealed, which means if the arbitrator does not make a fair decision the employee has no ability to argue their case before a higher court.

There are, however, some benefits of arbitration in employment. For example, arbitration can provide a simpler, less formal and less expensive means to have an employment case resolved.

Employment experts suggest that before an employee signs any type of employment contract they should understand how employment issues will be resolved. Refusing to sign an arbitration agreement could jeopardize your job, but you may be able to negotiate certain employment conditions such as the choice of arbitrator, the cost to arbitrate, what legal remedies are available if you win your arbitration, and whether or not you can have legal counsel present through the arbitration process.