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Should I sign a contract with an arbitration agreement?

When provided with an employment contract, it is common for employers to include an arbitration agreement in these contracts. So, if you have signed an employment contract recently, you may have agreed to this arbitration clause without even knowing it. So, what does it mean, and should you sign a contract with an arbitration agreement?

Arbitration agreements are commonly included in contracts by employers as the sole means for resolving any employment disputes that arise during the course of employment or termination. What it means if you sign an arbitration agreement is that you are essentially signing away your rights to pursue legal action against an employer in court, in the case of an employment dispute, such as discrimination or wrongful termination. Instead, you are agreeing to resolve this dispute though a process known as arbitration.

Arbitration means that your complaint will not be heard by a court or a jury, but rather will be heard by a neutral third party known as the arbitrator. After the arbitrator hears the case, the decision of the arbitrator is generally binding on both parties. There can be both advantages and disadvantages to arbitration, so it is very important to consider the full implications of these arbitration agreements in an employment contract.

For instance, some of the downsides of arbitration include, requiring you to give up your right to have your case heard by a jury of your peers; also, arbitration will likely limit the access to evidence and documents that you can request from the employer; and finally, there is generally no right to appeal a decision made as the result of arbitration. All of these things may negatively impact your case against an employer. Nevertheless, there may be some advantages to arbitration, such as the process being much less formal, often less expensive, and much quicker then the formal court process.

While arbitration is not always a bad way to handle employment disputes, it is important to know what you are signing and what you are agreeing to in an employment contract. You should always consult with an experienced employment law attorney to review the contracts and discuss your options with regards to employment disputes.

Source: Findlaw.com, Employment Arbitration Agreements, accessed April 24, 2018.