Watch Out for Arbitration Clauses

Employers Often Sneak These Into Employment Agreements and Offer Letters

An arbitration clause is legal language stating that you give up your right to sue your employer in court over job-related matters, including workplace discrimination, breach of contract, or wrongful termination.

Employers often insert these clauses into employment agreements or offer letters at the very beginning of hiring, when employees may feel especially reluctant to do anything to jeopardize their new job.

Arbitration vs. Court

If you sign a contract that includes an arbitration clause, you promise to stick to arbitration instead of taking your employer to court. This can often make the difference in whether you win or lose your case.

When you take your case to court, it will be decided by a jury of your peers. This is not a foolproof process by any means, but juries are often sympathetic to employees in workplace litigation cases.

In arbitration, your case will be heard by a single person—usually a retired judge, lawyer, or other professional—who is paid, sometimes by one side but often by both, to listen to the evidence.

The process also limits the volume of information that each side shares with the other—which often hurts the employee’s case, as the employer is likely to have most of the documentation relating to the case, and isn’t required to share it all.

Arbitrators tend not to be as sympathetic to workers as juries are, and they may not be working with all the information a jury would see. Plus, if you get a negative decision, you can’t appeal an arbitration—unlike jury verdicts.

What To Do if Your Employer Asks You to Sign an Arbitration Clause

When a new employee is hired, companies will often give them stacks and stacks of paperwork to sign. It’s very common for employees to skim these, or skip reading them altogether.

Even so, your signature will be taken as an agreement to everything in the document—even if you didn’t read the whole document. That’s how easy it is to sign away your right to a fair trial.

Whenever you move to a new job, it’s a good idea to ask an employment attorney to go over your new employment agreement with you and alert you to any red flags.

Arbitration clauses aren’t the only pitfalls in an employment contract or offer letter. Your attorney can help you spot any issues and develop a strategy for responding to them.

Call us at 267-273-1054 or email us at murphy@phillyemploymentlawyer.com for a free, confidential consultation today.

The information provided here does not constitute legal advice. It is intended for general purposes only. If you have questions about a specific legal issue, you should speak to an attorney.