Employment arbitration is a cost-effective and confidential way for companies to resolve disputes, but opponents argue it can favor employers. Some companies require employees to agree to forced labor arbitration, so prospective employees should ensure the process is impartial before signing.
As with other types of mediation, employment arbitration is a method that can be used to resolve various disagreements. It can be used for a variety of purposes, such as getting more employee benefits or resolving a contract dispute. In some cases, it can be used by the employer to justify demoting or firing an employee, once due process has been satisfied. There are many other problems that can be solved with this method.
Lawsuits can be very time consuming and costly, so some companies try to use workplace arbitration instead of judicial intervention. Even if you need outside legal advice, it may still be more cost-effective to use arbitration. There are other reasons to do so as well, including to keep those matters more confidential.
Court cases become part of the public record unless sealed by a judge. Employment arbitration records may be less public, if not entirely confidential. This is one of the issues contested by the opponents.
Many times, employees cannot afford the cost of hiring an attorney and pursuing disputes, so they will agree to labor arbitration to seek a resolution. If the mediation is fair and impartial, the parties may be able to reach a reasonable compromise. If internal arbitration is used, the rules can be written in a way that favors the employer. An objective external source for alternative dispute resolution would appear to be fairer and perhaps lead to greater success in arriving at an acceptable solution.
Some companies actually require employees to agree to participate in forced labor arbitration rather than taking any disputes to court. Such clauses may be included as part of a pre-employment agreement. Acceptance may be mandatory before a person is hired. While it generally makes sense for a company to offer employment arbitration, there are those who object to forced acceptance.
Prospective employees should inform themselves about the particular processes and sources the company uses for employment arbitration. Make sure the methods are fairly designed and the brokers are impartial before signing such an agreement. It’s also wise to consider whether such an agreement is prudent at the outset when a dispute has yet to arise. There is no real way to determine in advance whether the nature of a labor dispute is something that would have been comfortable settling in the conference room instead of the courtroom.
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