Forced arbitration has been in the news in recent months and years, and it has become more common in many workplaces. It has impacted more than 60 million workers in the U.S., by the Economic Policy Institute’s estimate, and the employees have not taken kindly to the proceedings.
The Nitty Gritty of Arbitration
Arbitration is a way to settle legal disputes outside the purview of the court, a legal system that can be used in place of traditional litigation. Usually, when most people think of resolving a legal issue, the bank on a court system has a lengthy process where a judge and jury decide on the outcome of a particular case. Arbitration, on the other hand, is a different process. Like litigation, the decision lies on the third party to bring out the outcome of a dispute, but the onus on the judgment does not depend on the judge or jury and it doesn’t happen within the court.
An arbitrator takes the decision and receives testimony from all the parties involved and it can happen in a shorter frame of time. In this case, the arbitration allows the plaintiff or the defendant to be the one to decide on the decision-maker in a less formal ambiance. In most cases, you can decide whether you want to pursue arbitration, instead of going to court unless it is mandatory – a provision which is also known as a forced arbitration clause.
A Forced Arbitration Clause at Work
These days, many employers include a forced arbitration agreement within the spectrum of a broader employment contract, and employees have to sign it to accept a job offer. In the eventuality, if you do not sign a formal employment contract, your employer may then include a forced arbitration agreement with other new employees doing the paperwork or within the employee handbook framework.
Although you don’t have to sign a forced arbitration agreement, you have to remember that there are certain employment benefits dependent on the fact of whether you want to agree to such a clause or not. Sometimes it may also mean that if you are saying no to the clause of forced arbitration, you are saying no to the agreement. Hence, linking employment to arbitration very strongly.
Appeals and Compensation in an Arbitration
Like litigation, arbitration can last for several days and even weeks. When it’s over, the arbitrator can then issue a decision. But unlike litigation, arbitration is generally binding and does not feature appeals – if you lose, you have little recourse. At the prospect of a win, arbitrators can issue smaller compensation awards than what you can get through litigation.
Ability to Present Your Case
When you sign a mandatory arbitration agreement you may not have the power to litigate an issue, because arbitration may have certain restrictions. These limitations can be related to several aspects, like the evidence you can submit – it may not afford the same time or amount of discovery – or it may simply limit the evidence you can submit. Arbitration can impact the ability to present your case. The rules around evidence can offer a quicker process but may affect your case if you let go of key testimony and documents.
The Privacy it Offers
Arbitration offers you a lot of confidentiality as it does not involve public decisions like the way a trial often does. This can also be positive or negative depending on the goals you may have. If you want to skip a lengthy court process, hide the circumstances of your case to be made public, and want to resolve the matter quickly, arbitration may be just what you need. In some cases, confidentiality can offer some problems when the forced arbitration clause is used in specific employment discrimination cases.
Since arbitration is most importantly a private process, it may keep the employer’s alleged misconduct far out of the spotlight and may allow the company to protect its reputation. In other words, the confidentiality that most arbitration proceedings need will stop you from letting other potential employees know all about the discrimination and discrepancies at the company, which may be a potential downside. So, you have to consider all aspects before signing the document featuring a forced arbitration clause.