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Harrisburg Alternative Dispute Resolution Law Blog

Protect yourself when signing an employment arbitration agreement

You aced your final interview, and your future employer has just offered you your dream job. Exciting news! You’re asked to come into the office to sign some pre-employment paperwork. But embedded in the stack is a document that gives you pause: an employment arbitration agreement.

When you sign an arbitration agreement for your job, you agree not to sue your employer for problems you experience in connection with your work. Instead, any issue must be handled through arbitration.

Employment arbitration agreement: what do you give up by signing?

Many non-union employers these days require their employees to sign an arbitration agreement before they are hired. What does this agreement mean, and what rights does an employee give up by signing it?

An arbitration agreement is a contract under which an employee waives their rights to sue over job-related issues such as discrimination, wrongful termination and breach of contract. Instead, employee disputes are handled through arbitration—a comparatively quick process in which an arbitrator (often a retired judge or attorney) hears evidence from both parties and then returns a decision on the matter.

What is a mini-trial?

Mediation and arbitration are two techniques commonly associated with alternative dispute resolution (ADR). Today we’ll examine a less known form of ADR called a mini-trial—a technique commonly used in large-scale business disputes.

A mini-trial has some similarities to mediation hearing. In both scenarios, each party’s case is presented, the results or non-binding, and it’s possible that no resolution will be reached. A key difference is that with mediation, the mediator is a neutral third party—who can be an attorney. The mediator acts as a facilitator to help both parties reach an agreement. With a mini-trial, each party has it’s own mediator—also typically an attorney—who acts as an advocate on their client’s behalf. The attorneys present their cases to a panel, which is often comprised of both parties involved in the dispute as well as a neutral intermediary. After the case is presented, the parties then try to reach an agreement. If this is not possible, they may permit the intermediary to put forth an opinion describing the likely result of pursuing litigation.

How emotional and economic losses impact mediation results

A study by the University of Chicago has examined the ways in which humans react to and evaluate different types of loss. The research finds that humans value emotional and economic loss differently when these losses are considered separately versus when they are considered in combination with each other. These different valuing systems lead to different outcomes in mediation.

Let’s say for example you live in an old apartment. Your building’s plumbing system has been around since FDR was president, and it’s in dire need of repair. Your landlord decides to completely re-do the piping—a massive project, which leaves you without running water for two weeks. Your apartment is unlivable. When you complain to your landlord about paying rent for an uninhabitable space, he becomes verbally abusive and threatening. You become concerned for your safety. Ultimately, you decide to move to a different apartment.

What can be done to ensure a mediation deal is enforceable?

At times, it can seem the law defies logic. Take the following scenario as an example. You and another party are in dispute over some issue. Maybe you have a difference of opinion over contract terms or a construction project. Maybe you need to resolve a parenting issue in the wake of a divorce.

Regardless, you undertake mediation with hopes of reaching a timely and cost-effective settlement. Agreement is reached. Thepaperwork is drafted and signed. The next day the other side's attorney calls to report a change of heart. Does that make the mediation agreement unenforceable? If it is, is there something that could have been done to prevent things from falling apart?

Mediating high-conflict divorce may not be impossible

We have observed in previous posts that the use of mediation to sort out issues in a Pennsylvania divorce can present challenges. Because the process requires a willingness on the part of both parties to approach resolving disputed family law matters with an attitude of cooperation, mediation might not be for everyone.

Experts generally agree that one indicator of when this form of alternative dispute resolution might not be advisable is when one of the spouses has a high-conflict personality. That is, if one spouse finds myriad ways to put up roadblocks to settlement and seems bent on putting things on a track to litigation, mediation might be fruitless. But, before dismissing the idea entirely, it might be worth stepping back to consider some "ifs."

What do I need to know about a liquidated damages clause?

Regular visitors to our site may be familiar with our "Best of the Hotline" feature. This is a section where we highlight topics that are on the minds of individuals around the state. If you have a real estate-related question, you might want to check it out.

In one recent offering from this area, we touched on what can be a common issue – a misunderstanding on the part of Pennsylvania home sellers about the meaning of the liquidated damages clause in agreements signed with listing real estate agents. Our hope with this post is to try to take a closer look at what this legal term means and what its implications can be.

Is there some way to overcome a mediation impasse?

It is a principle of law that every contract implies a duty of good faith and fair dealing by all the parties who sign the agreement. How that translates into action is less clear, as all experienced attorneys know. Courts can and often do recognize that the bounds of what constitutes proper enforcement and performance under a contract can vary depending on the circumstances of a given case.

It is unrealistic to think that conflicts will never happen between two individuals. Whether the parties are family members or business colleagues, disagreements arise. There are different ways to resolve the issues. Litigation is always possible, though in recent years mediation and arbitration as alternatives have become more common, holding out the hope of finding common ground with less drama and cost.

What are the common stages of the mediation process?

No two legal disputes are exactly alike. Each has its own nuances. Because of that, there is no way to predict the outcome of a case. Bringing matters to court is the traditional means by which individuals at loggerheads would seek resolution. However, in recent years, alternative dispute resolution has often proven useful and more cost effective.

In Pennsylvania and elsewhere, courts often now encourage the use of mediation or arbitration as the first step. If satisfactory terms can't be reached through negotiation, access to the courts remains an option. The questions that an experienced attorney can help answer center on what possible outcomes might result from going to trial – at what cost – and whether ADR methods might be viable.

Looking at the statutory exceptions to mediation privilege in Pennsylvania

Previously, we began looking at the topic of confidentiality and privilege in the context of mediation. As we noted, the general rule is that all mediation communications are both confidential between the parties involved and privileged, meaning that their disclosure may not be compelled in litigation or other processes.

Under Pennsylvania law, there are certain exceptions to this rule, and it is important for those entering into the mediation process to be aware of these exceptions and act accordingly. One exception is when a party to the mediation seeks disclosure of a settlement agreement for the purpose of enforcing that agreement in court. In order for a court to enforce the agreement, the terms would have to be disclosed. This exception does not apply, though, when the settlement document states that it isn’t intended to be legally binding. 

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