Labor and Employment

Employee Dispute Arbitration Clauses May Not Be Fair

An arbitrator is a privately hired judge. If you sign an arbitration agreement with your employer, including an employment agreement with an arbitration clause, you are agreeing to allow an arbitrator to resolve any disputes that arise between you and your employer. By doing so, you may have signed away the right to face your employer in court.

You Give up Important Legal Rights

An arbitration case will be heard by an arbitrator, not a jury. Although most arbitrators are professional and fair, they tend to be not as sympathetic to employees as a jury might be. You won't be able to request evidence from your employer nearly as easily as you can in court. Perhaps most important, in most cases you cannot appeal an arbitration decision.

Not All Arbitration Agreements Are the Same

The only way to determine the fairness of an arbitration agreement is to read it carefully. If possible, you should negotiate the wording with your employer before you sign it. Of course, many new employees lack the bargaining power to do this. At this stage of the game, they just want the job. A good arbitration agreement should give you and your employer equal power to choose the arbitrator. Since your employer probably has more money, your employer should be responsible for paying the costs of arbitration. You should have the right to be represented by a lawyer at the arbitration hearing.

Arbitration Agreements Are Governed by Federal Law

The Federal Arbitration Act (FAA) guarantees that arbitration agreements are enforceable in every state as long as they meet certain conditions. The FAA does not apply to employees in the transportation industry, such as railroad employees. It requires that arbitration agreements be put into writing. You must sign before you can be forced to arbitrate. If you sign an arbitration agreement and then sue your employer in court, your case can be thrown out of court. Courts also have the power to enforce an arbitration agreement by, for example, seizing money from your employer's bank account.

In Some Cases You Can Appeal an Arbitration Award to a Court

Although courts are reluctant to accept appeals of arbitration awards, you might be able to get a court to hear your case and overrule an award if you can show that the arbitration was unfair. This might happen if you could show that the arbitrator ignored the evidence, ignored the law, or wouldn't allow you to obtain or present evidence for your case. You might also win an appeal of your arbitration if you can show that the arbitrator acted corruptly - by taking a bribe form your employer, for example. Even if you win, however, the judge might simply send your case back to arbitration for a new hearing.

An Employment Lawyer Can Help

The laws on employment agreements can be complicated. Plus, the facts of each case are unique. This article provides a brief, general introduction to the topic. For more detailed, specific information, please contact an employment lawyer.

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