Employment Agreement with Arbitration Clause

When getting a new job, you may be asked to sign an employment agreement that includes an arbitration clause. This clause requires any disputes between you and your employer to be resolved through arbitration rather than through the court system. Here’s what you need to know about employment agreements with arbitration clauses.

What is arbitration?

Arbitration is a dispute resolution process that involves an impartial third party who makes a decision about the dispute. This can be binding or non-binding, meaning the decision is either final or can be challenged in court.

What are the benefits of arbitration?

Arbitration can be quicker and less expensive than going to court. It also allows for more flexibility in scheduling and procedures. Additionally, arbitration proceedings and decisions are often kept confidential.

What are the drawbacks of arbitration?

Lack of transparency and accountability can be an issue with arbitration. The arbitrator may not be held to the same legal standards as a judge, and there’s no jury to provide checks and balances. Also, because arbitration awards are often confidential, there is no precedent set for future disputes.

Should I sign an employment agreement with an arbitration clause?

It depends on your personal preferences and the specific circumstances of your employment. It’s a good idea to consult with an attorney who can advise you on your individual situation.

If you do decide to sign an employment agreement with an arbitration clause, make sure you understand the terms of the clause and its potential impact on your rights.

Finally, remember that signing an arbitration agreement doesn’t mean you give up all rights to sue your employer. You may still be able to bring certain claims in court, such as discrimination or violation of labor laws.

In conclusion, employment agreements with arbitration clauses can have benefits and drawbacks. Make sure you understand the terms of the agreement and consult with an attorney before signing.

Updated: June 7, 2023 — 1:35 am