Pros and Cons of Signing an Arbitration Agreement with Your Employer By Dan Atkerson on February 10, 2016

Arbitration agreements are popular among employers, which effectively prohibits the employee from filing a lawsuit in the future. Arbitration agreements require the employee to forfeit the right to sue an employer in the future for things such as wrongful termination, workplace retaliation, or discrimination.

Even if you don’t foresee any legal troubles on the horizon, be wary of signing arbitration agreements. They often favor the employer and leave the worker at a disadvantage.

Pros of Arbitration

Even though the cards are stacked in favor of the employer, there are a couple positives for employees in arbitration. For starters, they get resolved a lot faster than employment law cases in court.

Secondly, arbitration is often much more informal than a court case. This makes it a lot easier for employees with little or no litigation experience.

Cons of Arbitration

Unfortunately, the few positives are usually heavily outweighed by the negatives. Employees are typically at a huge disadvantage in arbitration for a variety of reasons, including:

The Arbitrator – A single citizen, usually a retired judge, is hired to oversee the case evidence and witness testimonies and make a ruling. Juries generally favor employees in lawsuits, but arbitrators not so much.
Flow of Information – Unlike a lawsuit, arbitration limits the amount of information both parties are required to share with one another. Since the employers typically control 90 percent of the information pertinent to an employment law case, they have the upper hand.
No Appeals – If a court case doesn’t go the right way, then you have the opportunity to appeal it to a higher court, but you forfeit the right to an appeal in arbitration.

If an employer asks you to sign an arbitration agreement, you are put in a difficult situation. An employer may be able to retract a job offer or even fire an at-will employee if they refuse to sign an arbitration agreement. This usually creates an unfortunate ‘now or later’ problem.