It has become a common practice for employers to include an employment arbitration agreement in most employment contracts these days, but many employees are unsure about what they are signing.
If you have signed an employment contract in the past 15 years, the chances are good that you also signed away your rights to sue your employer if you get fired for bad reasons or feel that you have been discriminated against at work. You are probably wondering how this happened. Well, to put it short, your employer probably included an employment arbitration agreement in your employment contract. If you signed this agreement, then you agreed not to pursue any legal action against your employer in court. Instead, any disputes that you have with your employer must be settled through a process known as arbitration. Arbitration is an alternative to filing a lawsuit and often has many different implications than a full blown case before a judge or jury.
Downsides of Arbitration
Let's start with the definition of arbitration. If you have a complaint that will go through arbitration, it generally means that it will not be heard by a court or a jury. Instead, your complaint will be heard by a neutral third party, called the arbitrator (these are generally retired judges or attorneys). This person is hired (either individually or through an arbitration service) to hear both sides of the case and make a decision. Because you signed the employment arbitration agreement, the decision of the arbitrator is generally binding on both you and your employer.
Upsides of Arbitration
Despite the disadvantages of arbitration, there are also upsides and advantages to the process as well.
Be Careful What You Sign
As mentioned, it has almost become common practice for some employers to include employment arbitration agreements inside of standard employment forms and documents. Because of this, many employees often sign these agreements without realizing it during the course of completing employment paperwork. Employees often do not know that they have signed away their rights to bring a lawsuit because the employment arbitration agreement was included as a clause within an employment contract, or in an employee handbook.
In short, read everything before you sign it. Read through all the clauses in an employment contract before signing it. Also, if you get a paper that says you have read and understand everything contained in an employee handbook, be sure to read and understand everything before putting your name down in ink. Lastly, you can also ask your new employer if any of the documents you are signing contain an employment arbitration agreement.
Be Careful About Not Signing
The next thing that you must consider is whether or not you would actually not sign your rights away. Keep in mind that your employer may rescind your job offer if you refuse to sign the arbitration agreement. In addition, at-will employees can potentially be fired for refusing to sign as well.
But you should always think about your bargaining power as well. If a certain employer has been courting you for months, chances are that they would be willing to give up the arbitration agreement in order to get you on board.
You last option is to agree to sign the agreement, but with certain modifications. This is discussed below.
Fair Arbitration Agreements
It will probably happen to most of us that our employer will be unwilling to forgo the arbitration agreement. After all, these agreements are most often in the best interests of the employer, not the employee. Even though your employer may not be willing to get rid of it altogether, you may be able to negotiate to make it fairer to you. After all, this way you are just looking out for your interests.
If you feel concerned about an overly-broad or restrictive arbitration agreement, you may want to talk with an attorney before attempting to negotiate. Lawyers are often good at finding things that should be changed within arbitration agreements. In general, these are some points that you may want to attempt to negotiate:
Discrimination and Other Agency Remedies
Because the arbitration agreement you sign only applies to you and your employer, you may still be able to take your employer to court for some reasons. For example, if you feel that your employer discriminated against you, you are free to go to the Equal Employment Opportunity Commission (EEOC) and make a complaint. The EEOC can, if they find adequate reason, sue your employer on your behalf because the arbitration agreement only applies to you, not to federal or state agencies.
Next Step: Free Claim Review
While the concept of arbitration sounds slightly confusing, it doesn't need to be. You can learn about the law in your state and see how it applies to your situation with the click of a button. How? With FindLaw's free attorney match. You can be paired with a local employment attorney at no obligation today and get a free case review.