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Some considerations re mandatory employment arbitration

On Behalf of | Nov 19, 2020 | Federal Employment Law

Upsides and downsides.

Commentators on arbitration agreements frequently stress both the potential positives and negatives of those contracts for workers who accept their terms and outcomes as conditions of employment.

It can’t immediately be stated in every case that an arbitration agreement or clause in a work contract automatically favors one side or the other in an employment relationship.

This much can be said, though: It is a company manager, not job applicant, who often insists on the execution of a mandatory arbitration agreement as a prerequisite to employment.

The positive spin on employment arbitration

Arbitration has long been a viable alternative to litigation in the federal work sphere as a mechanism for resolving worker/company disputes. Here are two key reasons why:

  • Comparatively informal and flexible procedure
  • Often conducive to cheaper and quicker outcomes

And the negative: criticisms of mandatory arbitration

Candidly, and despite features that are often spotlighted as commendable, workplace arbitration is increasingly targeted for downsides it can pose for workers.

An online legal overview of the process notes for example that arbitration “eliminates many of the rules and procedures that are designed to promote fairness in the court system.” That means this:

  • No jury peer review of evidence; arbitrator often selected by employer
  • Less access to relevant case information (discovery) than would be the case in a court proceeding
  • Decision finality; commonly no appeal of an adverse outcome
  • Secrecy surrounding outcome (arbitration agreements are often linked with nondisclosure clauses)

Those bullet point entries spotlighted in an article discussing the pros and cons of employment agreements are augmented by a central bottom line relevant for employees asked to execute such a contract.

That is this: “Be careful what you sign.” And secure prompt and legally sound guidance from a proven employment law legal team if you have any questions or concerns.


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