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Arbitration in the Workplace

Published:  October 23, 2020

As employers are well aware, employment litigation can be time-consuming, exhaustive, and expensive.  In order to streamline the process, some employers include arbitration agreements as part of their standard on-boarding documents.  Use of an arbitration agreement can be tricky and therefore an employer should carefully consider the pros and cons of an arbitration agreement before implementing.

Arbitration can be helpful in speeding the process of dispute resolution.  As employers are well aware, a case brought in a court or governmental agency can last for a very long time, consuming both time and monetary resources.  However, organizations such as the American Arbitration Association have their own rules that govern the arbitration process that are, in many instances, very similar to rules imposed by the court.  Arbitration can be quicker, cheaper, and the case can be heard by an arbitrator with a background in the particular subject matter at hand.

The wording of the arbitration agreement, however, is important.  An employee will typically challenge an arbitration agreement and want to pursue their claim in court.  In the event such a challenge is raised, the question then becomes, can the employee challenge the arbitration provision in court, or do they have to challenge the arbitration provision in front of the arbitrator.  According to a recent Massachusetts court decision, a carefully crafted arbitration agreement can lead to the question of arbitrability being decided by the arbitrator, and not a court. The wording of these agreements can therefore be very helpful in achieving the employer’s goal of avoiding the long and drawn out litigation process.

If you have any questions about arbitration, or any other labor and employment law matters, please feel free to contact the attorneys at The Royal Law Firm at 413-586-2288

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