employment agreement

Employers Often Include Arbitration Clauses Into Employment Agreements and Offer Letters

When you get a job offer, your prospective new employer usually tells you the exciting details, like your salary and benefits, but they seldom mention the fine print that they will require you to agree to if you want the position. Arbitration clauses are one of these items. 

Employers often include arbitration clauses in employment agreements and offer letters without discussing them with new hires. A Washington employment attorney with knowledge regarding the enforceability of such clauses in Washington can advise you about your rights.

What Is an Arbitration Clause?

In general, an arbitration clause forces you to resolve disputes with your employer in an arbitration proceeding instead of filing a lawsuit in court. An arbitrator is an individual who typically has a background in the law or your industry. For example, an architect might be an arbitrator in a dispute involving construction.

Typically, a person can file a lawsuit when the other party has breached a contract or committed some other legal wrong against them. Arbitration clauses require you to arbitrate instead.

Can an Arbitration Clause Change the Outcome of a Dispute?

The specifics of the arbitration clause will determine how it will affect you if you find yourself at odds with your employer down the road. Since the employer’s lawyer most likely wrote the arbitration clause, it is safe to assume that it protects your employer instead of you.

Be aware of the following factors in an arbitration clause:

  • Who selects the arbitrator? If the employer gets to select the arbitrator or the arbitration clause designates a certain group or company to serve as arbitrators, the process will likely be pro-employer and put the worker at a disadvantage. A better solution is to mutually agree on an arbitrator or o agree on a strike list process to select the arbitrator..
  • Is the arbitration binding on both parties? It should be. Fairness dictates that if one party gets bound by the results of the arbitration, the other party is as well. 
  • Who pays for the arbitrator? Often, the losing party has to pay the arbitration expenses. If you both have to pay half of the cost of the arbitrator, your employer will likely have little incentive to resolve disputes amicably before arbitration.
  • Does the arbitration clause take away your right to sue? Most arbitration clauses require you to waive the right to have your day in court. 

If your current or potential employer wants you to sign a document that includes an arbitration clause and you are weary of signing the agreement, you should contact a Washington employment attorney who can answer your questions and explain your legal rights.