What is arbitration? Arbitration is a form of dispute resolution that takes place between two or more parties outside of a courtroom, judge and jury. The arbitration session[s] are facilitated by an arbitrator who acts in a similar capacity as a judge – he or she reviews the case file, listens to witness testimony and rules on the outcome. Arbitration is becoming increasingly more popular as a form of resolution of job-related claims between employers and employees as it typically results in lower administrative and legal fees and the proceedings are less formal and usually shorter in duration than litigation. Arbitration generally results in a binding decision, known as an award.
When an employee has executed an agreement to arbitrate claims that may arise against an employer, he or she is giving up the right to bring a lawsuit against the employer. This can have advantages and disadvantages for the employee. When an issue arises, an arbitration is commenced when one party submits a Demand for Arbitration, a copy of the arbitration provision and the appropriate filing fee to the American Arbitration Association (AAA). From there, the respondent will be notified by the AAA, and a deadline will be set for an answer and/or counterclaim. Cases also may commence with a Submission to Dispute Resolution, the appropriate filing fee to the AAA and the consent of all parties if no arbitration agreement exists or the AAA is not named as the resolution provider in the agreement [from adr.org].
It is important for employees to carefully read an agreement to arbitrate before signing. It is even more important for employers to provide clear, concise and legally-sound terms in the agreement to avoid issues regarding the validity of the agreement. For a list of resources and services provided by the American Arbitration Association, visit www.adr.org.