Can an Employer Force You to Arbitrate a Dispute?

Arbitration is a dispute resolution technique that has gained in popularity in recent years. Arbitration basically works like a trial, with each side presenting evidence and witnesses to an arbitrator, who decides the dispute. However, arbitration is private and often much faster than court, so it is popular with employers, many of whom include arbitration agreements in their employment contracts.

But are these agreements legal? If you decide to sue your employer for breach of contract, for example, can your employer force you into arbitration?

Generally, arbitration clauses are valid, so long as they were signed voluntarily. However, the law is complicated, so you might need to meet with a New Jersey employment attorney to review any agreement you signed.

Requirements for a Valid Arbitration Agreement

There have been many legal disputes over arbitration agreements over the past 10 years. Because of these legal disputes, we now have a good idea of what must be included in an arbitration agreement for it to be valid:

  • The agreement must explicitly state that the parties are waiving all rights to a jury trial. For example, the agreement cannot simply state the parties agree to arbitrate a dispute.
  • The agreement must be simple and easy to understand. Too much dense legalese can make the agreement confusing and unenforceable since there is no meeting of the minds between the two parties.
  • The agreement should specify which legal claims are subject to the arbitration agreement. For example, an employer might require that all wrongful termination cases be arbitrated.
  • The agreement should state the arbitration forum. There are many different arbitration institutions, such as the Judicial Arbitration and Mediation Services, called JAMS for short. If the agreement is silent, then a court probably will not enforce it.

If the agreement is not clear and unambiguous, then a court will not enforce it. Since the employer drafts the employment contract, all ambiguity will be decided against the employer.

Why Employees Dislike Arbitration

Many people see arbitration as unfairly favoring employers. There are some simple reasons behind this belief.

For one, a large employer is much more likely to be in arbitration than an individual employee. A large corporation with thousands of employees might arbitrate dozens of cases a year. As a result, the business is a “repeat customer,” and arbitration institutions might favor the employer so they are hired to resolve future disputes.

For another, many arbitrators are former lawyers who worked on the employer side. They might have well established biases that favor employers over their workers.

Of course, this does not mean employees never win in arbitration. But, if possible, your attorney might try to convince a judge that the agreement is unenforceable, which could encourage an employer to settle a dispute.

Learn More About Forced Arbitration Agreements in New Jersey Law

Have you signed an arbitration agreement which you hope to get out from under? Contact Sattiraju Law today. One of our attorneys can review your agreement and the facts of the underlying workplace dispute. Contact us today to schedule a confidential consultation.