Unique Aspects Of Arbitration In Employment Law

One of the most distinctive aspects of employment arbitration has to do with the parties involved: employer and former employee. This relationship facially creates a power dynamic that at times could seem daunting for an employee, particularly when a dispute arises.

When starting a new position, many employers require, as a material condition of employment, that an employee agree to mandatory arbitration in the event of a dispute with that employer. As a general rule, these types of agreements are lawful and enforceable.

There are pros and cons associated with mandatory arbitration provisions for both the employer and employee. For example, many employers are keen to enforce these provisions because they are cost-effective, and concerning claims associated with discrimination or retaliation, the confidentiality of arbitration can protect an employer from unwanted public scrutiny.