After you secure employment, you may be asked to sign an arbitration agreement as part of the onboarding paperwork. Such an agreement waives your right to pursue legal remedies in court if an employment dispute arises. If you sign an arbitration agreement and an employment dispute arises, you will be forced to resolve the dispute through arbitration. Below, we explain the meaning of arbitration and the pros and cons of arbitrating employment law disputes for employees.
What is Arbitration?
Arbitration is one of the alternative forms of dispute resolution. Unlike litigation, where a case is heard in court, arbitration is a private procedure held outside of court. In arbitration, an arbitrator or a panel of arbitrators oversee the hearing. Arbitrators are often former judges, attorneys, or individuals who have undergone special arbitration training.
Arbitration involves simpler rules than those involved in court cases. For example, the rules of disclosure and evidence are far less strict in arbitration. Arbitration is generally also quicker than litigation.
In arbitration, the arbitrator or panel of arbitrators makes the final decision based on the evidence and arguments presented. And while arbitration is a less formal procedure, the arbitrator or arbitrators’ decision is legally binding. Once a decision has been rendered, it is hard for either party to appeal.
Pros of Arbitrating Employment Law Disputes for Employees
Generally, mandatory arbitration is favorable for employers and less favorable for employees. However, this is not to say there are no possible advantages of arbitration for employees. The following are some of the potential pros of arbitrating employment law disputes for employees;
A court case can take many months to resolve. Sometimes it can even take years to resolve a court case. This is because of, among other things, the packed court calendars, a more stringent discovery process, motions, hearings, and the trial. On the other hand, arbitrated cases tend to go much faster. Often, a case can be resolved through arbitration in a few months.
A Chance To be Heard
One of the most notable potential advantages of arbitration to employees is the opportunity to be heard. You can present evidence and testify about what happened during the arbitration process. If a litigated case is settled outside of court, as is the case with most litigated cases, the employee may not have the chance to testify about their grievances.
Cons of Arbitrating Employment Law Disputes for Employees
The following are some of the main reasons mandatory arbitration agreements are considered to be less favorable to employees;
Some Arbitrators Are Biased
At first, it might seem like the fact that your employer is the one covering the arbitration costs is a benefit to you. However, because your employer is the one paying the bill, the arbitrator or arbitrators may feel indebted to your employer. Arbitrators also build relationships with employers after hearing several cases sent by the employers to arbitration. Such a dynamic might result in arbitrators who are biased toward employers.
Privacy Could Prevent Changes in the Workplace From Happening
Arbitration hearings are private. Parties are also barred from talking about what happened during the arbitration hearings. Secrecy can allow a company’s illegal practices to continue.
Note: In 2022, the President signed H.R. 4445, a law that prohibits the application of mandatory arbitration clauses to sexual harassment claims.
Contact Us for Legal Help
If you have any questions or need help with an employment-related matter, contact our experienced New Jersey employment lawyer at the Trabosh Law Firm.