Arbitration is an alternative way for two adverse parties to clear up and settle disputes without having to go to court. It works by allowing both sides to present their cases to an arbitrator, who is supposed to be an impartial third party. The arbitrator decides the rules, considers the fact sets and arguments of both parties and decides the dispute.

Arbitration can be either voluntary or mandatory. In a voluntary arbitration, both parties agree to investigate their best options for resolving their differences and voluntarily submit their disagreement to arbitration. Also, in a voluntary arbitration, if either side doesn’t like the arbitrator’s decision, they still have the option to sue or join a class action.

On the other hand, with forced arbitration, one party, usually a company or an employer, as a condition of either buying a product or service or an employment agreement, requires the other party, such as a consumer or an employee, to submit to arbitration and waive their right to sue or participate in a class action lawsuit. In most cases when it comes to forced arbitration, the arbitrator’s decision is binding, final and the results are not only not public, but they’re not allowed to be discussed. And no one is allowed to appeal the decision.

There is nothing wrong with voluntary arbitration, because it’s a choice anyone is free to make. However, when it comes to forced arbitration, there is a growing chorus of voices rising up against it, because it takes away a person’s options. Increasingly, companies are using fine print to get more and more people to agree to forced arbitration and to give up their right to sue, even if the results of the arbitration are unsatisfactory.

The results of a study by the Consumer Financial Protection Bureau (CFPB) were released on March 10, 2015, and they provide significant ammunition to the argument that forced arbitration clauses are detrimental to consumers, harming their ability to obtain relief in disputes with certain types of companies.

More importantly, the study showed that forced arbitration severely limits a worker’s right to be treated fairly, in accordance with the law. Researchers discovered that forced arbitration clauses block class action lawsuits, which are often the only avenue available to employees in cases involving such issues as wage theft or discrimination. They also found that more than 90 percent of all agreements with arbitration clauses included a specific prohibition on class arbitrations.

Several groups, including the CFPB, are urging Congress to act on the results of the study and to make forced arbitration illegal as part of an employment contract. They argue that it should be against the law for any employer to force an employee into arbitration. In all cases, employees should know the provisions of the arbitration in advance, and should be given the ability to opt out without being penalized for doing so.

Be sure to carefully review everything your employer wants you to sign. If you are asked to sign an agreement containing a forced arbitration clause, contact a lawyer first to discuss your options.

References:

NELA Advocacy: Forced Arbitration

Workplace Fairness: Arbitration Agreements

NOLO: Signing an Arbitration Agreement With Your Employer

The post Forced Arbitration In The Workplace appeared first on Saenz & Anderson | Attorneys at Law Serving Aventura, FL and Miami-Dade County.