Employment Arbitration

Employment arbitration is a way to resolve workplace disputes outside of court. It is often used for issues like wrongful termination, unpaid wages, harassment, or discrimination. In arbitration, a neutral person—called an arbitrator—listens to both sides, reviews the evidence, and makes a final decision. Unlike mediation, which focuses on helping both sides agree, arbitration works more like a private trial that ends with a binding ruling (American Arbitration Association).

The process usually starts when both sides agree to arbitration. This can happen voluntarily or through an arbitration clause in a job contract. These clauses are often found in applications, handbooks, or employment agreements. Once a dispute arises, the parties select an arbitrator—either by agreement or from a panel list—and set a hearing date. During the hearing, both sides present their case through documents, witnesses, and testimony. The arbitrator then issues a written decision, called an award, which is legally binding under the Federal Arbitration Act (Sack).

Supporters say employment arbitration is faster, cheaper, and more private than going to court. It can also reduce the courts’ workload and help maintain workplace relationships. However, critics worry about fairness—especially with mandatory arbitration. Some say it gives employers an advantage, limits employee rights, and hides systemic issues from public view (National Employment Law Project).

Rules for employment arbitration depend on the provider (like AAA or JAMS) and the state. Some states have passed laws limiting arbitration in cases involving harassment or discrimination. Even so, arbitration remains common and continues to evolve with workplace law and policy (JAMS).

In short, employment arbitration is widely used but sometimes controversial. It can be efficient and confidential, but it also raises fairness concerns when it is required by employers.