In the world of business today, companies rely on their reputations to help them build their brand and grow their interests. When unsatisfied employees bring publicly accessible legal actions, the court activities can result in the company taking a financial hit and a scar on their reputation. As a result of this negative publicity, many firms now require their employees to sign an Arbitration Agreement.
Along with NDRs, arbitration agreements have become relatively standard across every industry. You may sign one without much thought as a provision to your employment. However, if you don’t do your research and negotiate the terms of your agreement, it can come back to bite you if your employer breaks the law or neglects to fulfill their employer commitments.
Before signing any legally binding document, especially when studies show that forced arbitration can be a threat to women employees, it’s best to read everything carefully and talk to your lawyer. Let’s take a closer look at what you should consider before you sign an Arbitration Agreement.
What Is an Arbitration Agreement?
An arbitration agreement is a legal contract between you and your employer that states that any disputes will be settled by arbitration instead of litigation. This simply means that you are giving up the right to sue your company in court and that any issues you have will be dealt with internally.
The arbitration process will allow both sides to present evidence to a hired arbitrator with experience dealing with employment law and disputes. There is no jury, and once the Arbitrator has made their ruling, it is final with no possibility of appeal. It is legal in the U.S. for an employer to rescind their offer of employment if you refuse to sign an Arbitration Agreement.
What Are the Downsides?
While arbitration may seem to be a fair and reasonable way to solve workplace disputes, most commentators will agree that the process often favors the employer and not the employee. Some drawbacks of mandatory arbitration include the lack of discovery, the confidentiality that prevents precedent-setting, and the absence of a jury.
- In a lawsuit, the Discovery process includes both parties in the dispute exchanging pertinent paperwork and evidence. In an arbitration, it is more common for the employer to rescind the employee’s access to specific paperwork belonging to the company. This can cause a higher burden of proof for the employee.
- In a court case, lawyers for an employee can rely on the jury to include ordinary working people and not just a panel of CEOs. Arbitrators are often retired judges or lawyers and are more likely to rule in favor of the employer’s evidence.
- The Arbitration procedure is entirely confidential. This prevents the setting of any presidents that future employees could use during their hearing.
- The decision of the arbitrator is conclusive without the ability to appeal.
Should You Sign?
If your current or prospective employer insists that you sign a mandatory arbitration agreement, you must consider your rights carefully. Read the document carefully, try to negotiate terms to include the choice of arbitrator, and talk to an attorney.
Mandatory arbitration can be an effective way to resolve workplace disputes. Before signing an arbitration agreement, know your rights and get the advice of an employment attorney.