It’s becoming more and more common in U.S. workplaces. Employers are asking employees to sign an arbitration agreement, giving up the right to sue over job-related issues. If an employee signs an agreement, it means that the employee must pursue any legal claims against his/her employer through arbitration, rather than a lawsuit. Arbitration agreements can come back to haunt you. Here’s how.
What is Arbitration?
Arbitration is an alternative way to resolve a dispute between two parties instead of filing a lawsuit and going to court. In order to proceed with an arbitration, both parties need to agree to arbitrate instead of going to court. How arbitration works is:
- One party sends the other a notice of their intent to arbitrate a dispute which outlines the basis for the dispute.
- There will be a hearing that may include either a single or a panel of arbitrators.
- The rules vary depending on the agreement, but the hearing is similar to one in a courtroom. Witnesses may be called, evidence is presented, questions are given, etc.
- Following the hearing, the arbitrator or panel will deliver a ruling.
Why You Shouldn’t Sign an Arbitration Agreement
Although an arbitration may be a cheaper, and sometimes quicker, alternative than going to court, it severely has a disadvantage to the employee. Unlike a trial, where you can request to have a jury of your peers decide the outcome, an arbitration relies only on the opinion of the arbitrator, someone who was paid to hear the case. It also limits the amount of information each side can get from the other. Chances are the employer will have more information on the case than the employee.
And, most importantly, arbitration rulings usually cannot be appealed. So if the employee feels the arbitrator’s decision is either unfair or favorable to the employer, the employee cannot argue the case again, unlike going to an appeals court.
Arbitrations are also not part of the public record. So if you claim that your employer is discriminating against you and you signed an arbitration agreement, chances are you won’t be able to change any of the employer’s practices. You will also be unable to join any future class actions against the employer for a similar issue.
Before signing any type of arbitration agreement, it is best to read the document thoroughly and speak to a lawyer. Contact the employment lawyers at Sanford Heisler Sharp, LLP, for an evaluation of your case.