You give up many rights, and protection from discrimination, by signing an arbitration agreement at work. Employees often sign these arbitration agreements unknowingly. You know how this happens. Remember that giant pile of paperwork you received on the first-day of work? Most people sign those documents without reading them. Sometimes the arbitration agreement is included in these papers as a separate contract. Other times, the agreement is hidden within the employee handbook acknowledgement form, employment contract, or hiring letter. You should slow down and read it all before signing your name.
By signing the arbitration agreement, you are agreeing to pursue all legal claims arising from your employment through an arbitration proceeding, rather than court. You are also voluntarily waiving your right to a jury trial in court. This might not seem like a big deal on the first day of work, but it will be really important if you are terminated for unlawful discrimination or retaliation. This could make a difference in whether you win or lose, and how much you recover.
Think about it. The winner of an arbitration trial is decided by an “arbitrator” who is probably a retired judge paid by the employer. The arbitrator is supposed to review the evidence, including witness testimony and documents, and then decide the case. In court, the jury decide who wins. Juries are often sympathetic toward employees, but arbitrators are not. You can’t imagine how often this works in favor of employers.
To make matters worse, the arbitration agreement will likely limit the amount of evidence you can collect and introduce during the trial, and how you obtain that evidence. These limits are not helpful in employment cases because the employer has most of the documents and information. It’s much easier to get information from the employer in a court case.
You can refuse to sign an arbitration agreement, but you will likely lose the new job if you do. Some agreements say you can “opt out” of the arbitration program. Definitely do this if offered. Some employers may even negotiate with top candidates about arbitration.
BOTTOM LINE: Don’t sign any document acknowledging you’ve read another document unless you actually read and understood the other document. And watch out for any papers that says you agree to terms contained in other documents.
REMEMBER THIS: You can still file a discrimination or retaliation complaint with a government agency. In some cases, the agency can still sue the employer. Arbitration agreements cannot eliminate this right.
Contact Bryant Whitten – Attorneys for Employees if you have questions about arbitration agreements.