Arbitration of Employment Disputes by My Employment Lawyer

By Neil Klingshirn

Contents

My employer wants me to sign an arbitration agreement. Should I sign it?

Probably not.  You need to decide for yourself whether an arbitration agreement makes sense for you. This article answers most of the frequently asked questions about arbitration agreements.  As a general rule, however, most employees find that the costs of mandatory arbitration outweighs its benefits. 

If you believe that you have to agree to arbitration, read this article to find out what you are in for and follow the tips for negotiating an employment agreement.

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Do I have to agree to arbitration?

No.  However, many employers require employees to agree to arbitrate claims as a condition to being hired in the first place.  In other words, employers can force you to chose between arbitrating claims against them or else working somewhere else.

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I was already working when my employer asked me to sign an arbitration agreement. Can my employer fire me if I do not sign the arbitration agreement?

Yes, if you are in Ohio.  Unless you already have a contract for a specific period of time, an employer can require you to sign an arbitration agreement in order to continue your employment.

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I already agreed to arbitrate my employment law claims. Does that mean I cannot go to court if I want to sue my employer?

Probably.  It is possible in some cases to avoid arbitration. As a general rule, though, if you agreed to arbitrate your claims, you probably will not be able to go to court.

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I already filed the lawsuit in court. Do I still have to go to arbitration?

Probably.  If you agreed to arbitrate claims against your employer, the employer can ask the court to stop, or “stay,” the lawsuit. At that point the only way to pursue your case will be through arbitration.

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I do not remember agreeing to arbitrate claims against my employer. Do I still have to go to arbitration?

The employer has to prove that you agreed to arbitrate your claims against it.  The agreement must be in writing.  Normally the employer will have to produce a copy of the signed and written agreement.

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The arbitration agreement that my employer showed me did not have my signature on it. Do I still have to go to arbitration?

Maybe.  The employer has to prove that you agreed to arbitration and, in Ohio, that the agreement is in writing.  The employer does not have to prove that you signed the arbitration agreement.  In other words, if your employer can prove that you agreed to arbitration even though you did not sign the agreement, you may still be bound by the agreement.

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What exactly is arbitration? How bad can it be?

Arbitration is a process for resolving legal disputes that uses private arbitrators hired by the parties instead of the courts. Once the arbitrator makes a decision, the parties usually cannot appeal it and the decision is binding.

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Why should I arbitrate my dispute?

You might not have a choice.  If you "agreed" to arbitration, the arbitration process may be the only place for you to pursue your rights. 

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Does arbitration have any advantages over court trials?

It depends on your point of view.  Arbitrations substitute an arbitrator for a judge and jury.  Employees usually prefer to have juries hear their case, while employers complain that jury awards get out of control.  Apart from who decides the case, some say that arbitrations are faster and cost less than lawsuits filed in court.

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Why do employers like arbitration?

Employers say that they prefer arbitration because:   

  • Arbitration has a quicker hearing. Most arbitration hearings usually occur within a year. Civil suits can take two or more years to reach trial.  
  • Arbitration awards are usually not appealed.  The parties have a very limited right to appeal the arbitrator’s decision.
  • The arbitration process is less expensive than litigation.  This, however, is not necessarily true, especially for the employee.
  • Arbitration lets employers change employment rights with an “agreement” with the employee. Courts take a dim view of such restrictions, however, may not enforce them.

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Is arbitration cheaper than court?

Not for the employee.  Unlike court, where the judge and jury provide a governmental service at little or no cost to the parties, the parties have to pay an arbitrator and an arbitration service.  Together they can easily charge $15,000 or more just to arbitrate a basic employment claim.  

Employers point out that arbitrations may involve less legal work and therefore legal fees are less.  These costs are not saved by the employee, however, who typically pays her lawyer on a contingency fee based on results, regardless of the amount of work that her lawyer must do.

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I thought that I had a constitutional right to a jury trial. Can an arbitration agreement violate my right to a jury trial?

Your right to a jury trial is “waivable,” which means that you can decide not to ask a jury to decide your case.  The key to arbitration is an “agreement” to arbitrate claims. By agreeing to arbitrate, you agree to give up, or waive, your right to a jury trial.

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How can I learn more about arbitration of employment disputes and how to avoid them?

Try Mel's FAQs on:

Mel has also collected Questions and Answers, Wiki articles and Blog articles about arbitration agreements.

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Have an Employment Law question?

Contact Neil Klingshirn

Neil Klingshirn
AV rated Super Lawyer and Employment Law Specialist
Independence, OH
Phone: 216-382-2500