Armstrong & Associates Employment Law Firm

Should you sign a contract with an arbitration agreement?

Arbitration agreements are common in employment contracts. You may wonder if it is in your best interests to sign a contract that includes one.

It can help to understand what they are and what they mean to you before you sign. According to Mighty Recruiter, an arbitration agreement is where you commit to mediation over any disputes about the contract rather than having the right to take your employer to court.

The issue

The biggest issue with arbitration agreements is that they usually favor employers. You are more likely to get bigger settlements and better wins through a lawsuit than mediation. This makes it essential that you understand the agreement before you sign your contract because you want it to be as fair as possible.

The details

Not every arbitration agreement is the same. Some will restrict your right to sue in all situations while others may only require arbitration for specific reasons.

There may also be differences in the results of mediation. Most of the time, the ruling in mediation is binding, but there may be some agreements that do not make the ruling in mediation binding or at least give you the option for appeals.

The benefits

Employers have many reasons why they want arbitration agreements. The most common is that mediation is cheaper and faster than litigation. Employers also like these agreements because they increase confidentiality and are informal in nature.

Employees may find them beneficial in situations where they do not have the strongest case since a mediation typically results in some type of settlement. It may be easier to have a win in medication than in a courtroom.


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