How to Reclaim Power in Forced Employer Arbitration

We’ve discussed in previous posts some of the pitfalls of mandatory arbitration clauses in employment contracts—which often benefit the employer over the employee. If you’re offered a job and your new employer requires you to sign such an agreement, you may assume you have no option other than to blindly agree. After all, you might expect that refusing to sign means you’ll lose the job offer.

However, there is an important middle ground that’s worth exploring: negotiation. You probably already know that you can negotiate on things like salary, vacation, flex time and project placement. You shouldn’t assume that the terms of your arbitration aren’t also up for discussion.

Of course, you don’t want to give your new employer the impression that you have the intention of initiating a legal battle once you start working for them. However, what if you’re wrongfully terminated or face discriminatory treatment at work? You deserve to take steps to protect your interests. Here are a few things to keep in mind:

  • Selection: Ask for a stipulation in the arbitration agreement which states that you and your employer will have equal say in who is selected as the arbitrator.
  • Neutrality: You want to be sure the arbitrator is a neutral third party. Include a condition in the contract which requires any arbitrator in consideration to disclose any connections they have to the employer or interest they have in the outcome of the arbitration.
  • Damages: Often, arbitration limits the remedies you can receive—such as punitive damages or compensation for emotional distress. Include a caveat in the agreement stating you are eligible to receive the same remedies as you would through litigation.
  • Payment: Add a clause to the agreement explicitly stating that your employer will cover the costs of all legal fees in the event of arbitration.
  • Counsel: With a lawsuit, you’d have the right to an attorney. Ensure that you retain this right if you face arbitration.

Consulting with an experienced employment attorney can be a worthwhile step in helping you to draft such amendments to an arbitration agreement.