You just landed a job, and your employer asked you to sign various documents, which includes an arbitration agreement. You don’t know what it is and are wary if you should sign or not. So the question is, should you sign it and why does your employer want you to sign it?
There are various reasons when your employer would want you to sign an arbitration agreement, but the most common cause is basically money because arbitration is a less costly alternative to litigation if an employee-employer dispute arises. But there’s more to it than that.
Why Your Employer Wants You to Sign an Arbitration Agreement
An agreement to arbitrate is basically a contract stating that you’re giving up your legal right litigate in court should you have a dispute with your employer, and that you’re agreeing to resolve your conflict strictly through arbitration.
You can get help from an experienced lawyer specializing in mediation and union arbitration cases such as Littleton Alternative Dispute Resolution, Inc. With arbitration, there’s a decision maker, which is the arbitrator, whose job is to decide on the issues that need resolution.
However, the entire procedure is more streamlined, and there’s no evidence or jury involved, so it’s cheaper and quicker than litigation.
Employers also believe that arbitration is usually on their side because of the lack of a jury, since a jury is usually more inclined to empathize and side with the “little guys”, or the employees in employment disputes.
Additionally, arbitrators are typically lawyers or retired judges capable of setting their emotions aside and focusing only on the presented facts.
But these reasons are purely subjective, and there’s actually research that indicates that employees usually win at arbitration than in litigation. Likewise, although some research shows that employees are awarded more money in a lawsuit, others indicate that arbitration awards are similar to those in court trials.
Regardless of this research, the belief remains that arbitration is better for employers, which is probably the reason why your employer wants you to sign an arbitration agreement.
Before signing an arbitration agreement, read everything thoroughly. If you see something you don’t understand, don’t hesitate to ask questions until you fully understand it.
The reason for this is that there are some provisions in an arbitration agreement that have been prohibited by courts because they’re biased towards employers. There might also be provisions that you might want to negotiate before you sign the agreement.