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Considerations When Signing an Employee Arbitration Agreement

Employees are often asked to give up their right to sue in court over job-related issues. This is generally accomplished by having the employee sign an agreement that contains some form of a mandatory arbitration clause.  An employee who signs this type of clause promises not to pursue any legal claims against the employer through a lawsuit, but must instead arbitrate with the employer.

 An arbitration clause can limit your legal options if your rights as an employee are later violated at work.  It is important, therefore, to consider the pros and cons of arbitration before signing off on such a clause.

The advantages and disadvantages of arbitration

In arbitration, a neutral third-party individual arbitrator listens to the facts of a particular case as presented by the disputing parties. The arbitrator then determines what action should be taken to resolve the matter.

 Arbitration has a number of advantages over a typical court trial:

 It is less formal, making the process easier and more comfortable for the parties

  • Cases are decided faster than in a court of law
  • Cases are less expensive

 Arbitration does have its disadvantages, though, particularly from the employee's point of view:

  •  It limits the amount of information each side can get from the other. 
  • This can hurt the employee because, more often than not, the employer holds most of the documentation relating to the employee’s case
  • An arbitration decision usually cannot be appealed.

What to watch out for

In general, California courts will enforce mandatory arbitration agreements, unless they are found to be to be extremely unfair or one-sided. To protect yourself from unwittingly giving up your rights, carefully review any document given to you as a prospective employer before you sign it.  Pay particular attention to the arbitration clause in your employment agreement to ensure that you agree to the terms of the clause.

 While arbitration can be extremely effective in many cases, it is not always the ideal process to resolve employment disputes. To learn more about the arbitration process and whether it is the ideal process for you, contact an experienced Stockton arbitration lawyer.

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