Employee Arbitration Agreements


The most valuable benefit of employee arbitration agreements is their ability to deter legal action. Arbitration is a binding form of Alternate Dispute Resolution. Arbitration is usually quicker, involves less discovery, is more confidential, and usually results in less attorney’s fees. The Arbitrator is often more conservative and knowledgeable than a jury. A jury often tends to be more passionate, unpredictable and they have the ability to award punitive damages. Also, the ruling by the Arbitrator can only be appealed if clear evidence can be shown that the Arbitrator showed manifest disregard of the law, corruption or fraud on the part of the Arbitrator, or the Arbitrator exceeded his/her power or authority.

An Arbitration agreement can be installed at any time and instantly becomes a condition of employment. However, please be aware that you may encounter some resistance from your employees. If resistance does occur, you have to be willing to terminate any employee that refuses to sign the agreement. Once the agreement has been handed out to the employees, give them a day or two to look over the agreement, sign and return. Once the deadline has passed, any employee that has not returned their signed form should be asked to leave until they do so. New employees should be given the form with their initial paperwork.

Your attorney would be the best person to draft an Arbitration Agreement for your company; however, ELM will be glad to help in any way we can.