Employment Arbitration Agreement in California: Everything You Need to Know

Arbitration agreements are a common practice in the employment sector, and they are a way of resolving disputes between employers and employees without going through the court system. Arbitration agreements are contracts between employers and employees that require any disputes to be resolved through arbitration instead of litigation. These agreements are widely used in California and throughout the United States, and they have become even more popular in recent years due to legal developments, such as the Supreme Court of the United States’ 2018 decision in Epic Systems Corp. v. Lewis.

In this article, we will discuss the specifics of employment arbitration agreements in California, their benefits and drawbacks, and what employees should keep in mind when signing one.

What is an Employment Arbitration Agreement?

An employment arbitration agreement, also known as a pre-dispute arbitration agreement, is a contract between the employer and employee that dictates that any disputes that arise between the two will be resolved through arbitration rather than in court. Arbitration is a process by which a neutral third party, known as an arbitrator, hears evidence from both sides and then decides on a resolution. Arbitration agreements are a popular alternative to litigation because they are typically faster, less expensive, and more private than going to court.

Benefits of Employment Arbitration Agreements

For employers, arbitration agreements have several benefits. First and foremost, they can help reduce the costs of litigation. When a dispute arises, it is often less expensive to resolve it through arbitration than it is to litigate in court. Additionally, arbitration is typically a faster process than litigation, which can help employers resolve disputes more quickly.

For employees, arbitration agreements can offer some benefits as well. For example, arbitration can be a less formal process than litigation, and employees may feel more comfortable presenting their case to an arbitrator instead of a judge or jury. Additionally, arbitration can be a more private process than litigation, which can help protect employees from publicity and public scrutiny.

Drawbacks of Employment Arbitration Agreements

There are also some drawbacks to employment arbitration agreements that both employers and employees should be aware of. One major concern is that employees may be giving up their right to a jury trial and other legal protections by agreeing to arbitration. Additionally, some critics argue that arbitration agreements can be a way for employers to avoid accountability for wrongdoing.

What to Keep in Mind When Signing an Employment Arbitration Agreement

If you are an employee who is being asked to sign an employment arbitration agreement, there are several things that you should keep in mind. First, you should make sure that you understand the terms of the agreement. For example, you should know what types of disputes are covered by the agreement, and what the arbitration process will entail.

You should also consider whether you are comfortable giving up your right to a jury trial and other legal protections in exchange for the benefits of arbitration. If you have any concerns about the agreement, you may want to consult with an attorney before signing it.

Conclusion

Employment arbitration agreements are a common practice in California and throughout the United States. While they can offer several benefits, such as reducing the costs of litigation and providing a more private process for resolving disputes, they also have some drawbacks, such as potentially limiting employees’ legal protections. If you are an employee who is being asked to sign an employment arbitration agreement, it is important to understand the terms of the agreement and to consider whether it is in your best interests to sign it.