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How to make an employee arbitration agreement work for you

You’ve probably seen one before. You get offered a new job, and your human resources liaison hands you a stack of documents to sign. Tucked away in the pile is an employment arbitration agreement—an innocuous-looking form which essentially states that if you have a legal dispute with your employer, you’ll agree to deal with it through arbitration (rather than litigation). “That’s fine,” you think. After all, everyone at the company seems perfectly honest and respectful—you don’t anticipate any problems at all.

While all of this may be true—and while the chances may be good that you’ll never encounter legal issues with your employer—have you thought about what rights you’re actually giving up by signing? In a worst-case scenario, what can you stand to lose? A few things:

  • A jury: Juries have a tendency to be sympathetic to employees in employment disputes. However, with arbitration, your case is decided by an arbitrator (usually a retired judge or attorney).
  • Evidence: In arbitration, there is a limited amount of evidence you can present or request from the other party. This can be a disadvantage for the employee, because employers often possess the bulk of meaningful evidence in employment disputes.
  • Appeal: In arbitration, all decisions are final. You forfeit the right to appeal the decision.

However, if you’ve been presented with an employment arbitration agreement after provisionally accepting a job offer, you don’t need to feel like you’re being backed into a corner. You can try to negotiate the terms of the agreement—just like you negotiated your salary. For instance, you can request added conditions to the agreement:

  • That a proposed arbitrator disclose any professional or personal relationships that may result in bias for one party
  • That you have equal say in picking an arbitrator
  • That any compensation you receive in arbitration be equivalent to what you would have received in a lawsuit

Don’t feel forced into signing something that doesn’t serve your interests. It is important to understand how to protect your employee rights.

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