Does An Arbitration Agreement Affect Your Employee Rights?

You get hired for a job. Your new employer hands you a stack of papers to sign. Employment application, non-disclosure agreement, and all kinds of policies. You may or may not notice that one of the documents says something about giving up your rights to a jury trial and agreeing to resolve all disputes in binding arbitration. You may think that it is a standard document, glance it over, sign and date it. What exactly is an arbitration agreement and why should you care?

In our practice as work discrimination attorneys in San Diego and San Bernardino we frequently get calls from individuals who have been terminated from employment. We ask if they signed arbitration agreements during their application or hiring process and often the answer is yes. An arbitration agreement is a contract between you and your employer in which you both agree that any dispute arising out of your employment will be decided by an arbitrator and not by a jury in a state or federal court.

So what, you may think. Ah, but there is a catch. And what a catch it is. The Seventh Amendment to the United States Constitution provides for a right to trial by jury in civil cases. Jurors are generally drawn from the same geographic area where the trial is held and are paid a nominal sum per day for their service. They decide if your attorney(s) prove your case and how much, if any, damages to award to you.

An arbitrator works for a private company known as an arbitration provider. The arbitration agreement you may sign will usually specify a provider. Your employer is supposed to pay all arbitration related costs. Some employers hire the same arbitration provider again and again. Sometimes companies will hire the same arbitrator over and over. Could it be that the arbitrator knows who is signing his or her paycheck? This does not necessarily mean that all arbitrators are unfair. But studies have shown that plaintiffs in employment cases prevail in state court 59% of the time, but only 21% in arbitration. Plaintiffs prevail or win 14.7% of the time if the arbitrator has been involved in prior arbitrations for the same employer.

But not all is lost, even if you signed an arbitration agreement. An arbitration agreement must include certain rights and many do not. The attorneys at Stephen Danz & Associates have successfully opposed many arbitration agreements on behalf of employees who have been unlawfully harassed, discriminated, and terminated by their employers. Contact us today for your free consultation.