In May of this year, the US Supreme Court handed down a decision regarding employment arbitration agreements that affect all employers and employees. If you have a job or employ workers, this is something you want to understand.
What Are Employment Arbitration Agreements?
Some employment agreements include a mandatory arbitration clause. Arbitration allows people who have legal issues at the workplace to resolve them without going through the court system or filing a lawsuit. Arbitration is used by both employers and employees.
In arbitration, the dispute is brought to a panel of people in a private proceeding by the party pursuing a certain claim. There is no jury or trial. Whatever happens in the arbitration process is almost always binding, meaning if you as an employee or employer don’t like the results, you aren’t able to appeal it further through the court system.
US Supreme Court Decision
In the past, groups of employees could ban together under a similar dispute and bring a class action lawsuit against an employer. In May, the US Supreme Court did away with this and ruled that any employee with an arbitration clause in their employment agreement has to pursue the claim via arbitration for resolution.
Pros and Cons of Employment Arbitration Agreements
First, arbitration means that any employee with a somewhat minimal dispute, let’s say of several hundred dollars of unpaid overtime, arbitration can be expensive and make it not worth the hassle. This means it may become harder for employees to resolve disputes with their employer. One pro to arbitration is that it’s a relatively quick process in comparison to dispute resolution through a lengthy legal process.
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