What is an arbitration agreement?

 

​

Most clients I speak with never remember whether they signed an arbitration agreement with their employer or not.  This isn't surprising.  

​

You know that stack of papers the HR representative or training manager gives you on your first day or during orientation?  The one with the tax forms (W-4 and I-9), the company policies policies and procedures handbook, and the seemingly endless pile of documents they describe as some form of "necessary paperwork" that doesn't need to be read but just needs your signature.  

 

It's generally swept under that rug, but it's buried in fine print and looks something like this:

​

READ BEFORE SIGNING: I, (YOUR NAME IN PRINT), AGREE TO NOT SUE IN COURT AND INSTEAD AGREE TO ARBITRATE AGAINST MY BOSS OR EMPLOYER IN COURT, EVEN IF THEY STEAL FROM ME, DISCRIMINATE AGAINST ME, SEXUALLY HARASS ME,  INJURE ME, OR DON'T PAY ME.  OH YEAH, I ALSO AGREE TO PAY FOR HALF OF THE COST OF THIS AND FOR MY LAWYER TOO, AND MAYBE I'LL HAVE TO PAY FOR MY EMPLOYER'S LAWYER IF I DON'T WIN.

​

Signed: /s/  (Your Name In Cursive)   

​

​

By signing an arbitration agreement, you give up the right to sue your employer in court for certain conduct that your employer may commit against you in the future (e.g., not paying your wages properly or discriminating against you based on your race, gender, etc.).  

 

Instead, you trade your right to sue your employer in court for privatized arbitration by a third party "neutral" that determines the outcome of the case instead of a judge.  The agreement often makes seemingly reassuring statements like arbitration is a great cheap alternative used "in order to avoid the time and costs associated with litigation in court, blah, blah, blah."  

 

Sounds nice–it's not.  

 

It actually stacks the deck against you because it deprives you of your right to access the court system.  As WorkplaceFairness.Org describes it:  

 

 

The public court system provides the protection of a system relatively free from the influence of the employer - a protection often not provided in forced arbitration.  Additionally, the court system is open to public scrutiny and its decisions are subject to appeal.  In employment cases, access to discovery is critical, since so much of the information you need to prove your case is in your employer's hands.  Unlike arbitration in labor or commercial disputes, instead of having a contract govern the relationship between the parties, there are laws that must be interpreted and enforced as they apply to the employment relationship, which makes these cases more complex and require judges well-versed in the law. These and many other valuable features of the public court system are either limited or not available in the forced arbitration system.  Lastly, not only are there often much higher costs associated with forced arbitration than with use of the public court system, but recent evidence shows that employees who are governed by forced arbitration rarely file claims. This allows employers who violate employee protection laws to continue to do so without being held accountable for their actions.

​

Read the whole thing here.  

 

Read more about this in a beautifully crafted article by the New York Times here.

 

​

Questions?  Call me.  Text me.  Email me.  

 

JUST DON'T SIGN ONE OF THESE.