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What is Forced Arbitration

Forced arbitration is a term that many may not be familiar with but are affected by. Forced arbitration is an action that certain employers may take to ensure that their employees, or sometimes consumers, may not take a dispute to trial, but rather to arbitration. On the most basic level, forced arbitration means that employers force employees to sign away their right to a trial by jury involving any future problems in the workplace and to replace it with arbitration, or a decision made by a set of neutral arbitrators outside of the court. For an employer, there are many benefits to forced arbitration:

  • Less notoriety. A public trial may last years and could paint certain employers in a bad light. Forcing a dispute to end in arbitration means that decision or the case may not be public knowledge.
  • Less costly. A trial could tack on millions of dollars worth of fees, depending on how long it takes to reach a verdict and what the outcome is. Forcing the dispute to end in arbitration saves companies money, as they do not have to drag the dispute out.
  • Generally binding. Unlike a traditional trial, the decisions made in arbitration are usually binding and therefore cannot be appealed. This is a benefit to an employer as the dispute will not be able to come to light again.
  • Condensed timeline. Arbitration saves employers time as it allows less time for parties to fully argue their case, making it an ineffective way for an employee to get their point across.

Signing a Forced Arbitration Clause means that any employee who is looking to take legal action against their employer for any reason may not receive the proper outcome necessary to replace their damages. As an employee, signing a Forced Arbitration Clause could mean:

  • Less compensation. Arbitration is known to produce less compensation to the employee because there is less time to argue a case.
  • Loss of an appeal. Losing arbitration typically means you are not able to appeal any decision made by the arbitrators, no matter how biased or unfair the decision may seem.
  • Lack of change. The cases found in forced arbitration are serious and legitimate claims made by employees against their employers. Many times, arbitration allows the cycle to continue and allows employers to continue to mistreat their employees with little repercussion.

If you have recently started a new job or are worried you may have signed a Forced Arbitration Clause with your employer, it is important to understand your options. Have an experienced attorney read and review any employment contracts before signing them to be sure what you are agreeing to. In the case that you have already signed documents forcing arbitration upon you, meeting with an attorney who understands Forced Arbitration Clauses may be beneficial.