On the Job: What is this arbitration agreement I signed and what does it mean?

This column is written and sponsored by Alan Lescht and Associates, PC, an employment litigation firm in Washington, DC, that handles cases involving contract disputes, wage and hour issues, discrimination and retaliation, wrongful termination, whistleblower retaliation and security clearances.

New employees are frequently faced with a bundle of papers that they must sign when starting a new job. This may include a mandatory arbitration agreement, which could be buried in a lengthy employment handbook. If you are faced with signing an arbitration agreement, or have already signed one with your employer, it is important to read and understand the agreement and the rights you may be giving up.

What is an arbitration agreement?

Arbitration agreements limit an employee’s right to go to court in the event that a conflict arises that falls under the scope of the agreement. Instead of filing a lawsuit in court, an employee must file a demand for arbitration, where a neutral arbitrator will be appointed, review the evidence presented and decide on the outcome of the conflict. If the arbitrator decides the case in favor of the employee, he or she will also make a finding on damages.

What are the pros and cons of arbitration?

Employers frequently favor arbitration agreements because it is a less expensive alternative to litigating a conflict in court. Employers also view arbitration as more predictable, as a trained legal professional, oftentimes a lawyer or judge, will decide the outcome of a case rather than a jury.

Arbitration may also be more cost-effective for employees, and will likely mean a quicker result than if the employee litigated his or her case in court. However, in arbitration the employee will likely be limited in his or her ability to engage in discovery, which is extremely valuable in employment cases.

Can I be bound by a mandatory arbitration agreement?

The short answer is yes. Even though employees often do not have a choice regarding whether to sign an arbitration agreement, courts have found that they are still enforceable.

Do you need help reviewing your employment documents?

Find out what you’re signing before it’s too late! If you have questions about a company handbook, arbitration agreement, or employment agreement, contact Alan Lescht & Associates today to set up a consultation. We offer low rates to review and advise on all types of company documents.

Call us today at (202) 463-6036, send us an email or visit our website and blog. Our 13 attorneys have vast experience in all areas of employment law. Super Lawyers, Washingtonian, Newsweek, AVVO, and others have recognized us as a leading employment firm in DC.