Caldwell & Kearns, P.C.
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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.

Arbitration vs. litigation

Arbitration is often much faster (and cheaper) than litigation. It does not involve a jury—which can be seen as a disadvantage for employees, as there is a common perception in employment lawsuits that juries tend to be sympathetic to employees. Additionally, arbitration places limits on the amount of evidence that one party can request from the other. This restriction can disadvantage the employee, who will typically have access to less documentation necessary to make their case. Finally, the decision made by the arbitrator is final; it cannot be appealed—unlike a verdict in a court of law.

Employee rights to sue

It is worth noting that even if you have signed an arbitration agreement with your employer, you still have recourse outside of arbitration if you suffer workplace discrimination. While you are prohibited from suing your employer directly, you may be able to get the federal government to do it for you. You can file a complaint with the Equal Employment Opportunity Commission (EEOC), and if they can decide to sue your employer on your behalf.

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