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What is an arbitration agreement -- and do I have to sign one to keep my job?
5. What is an arbitration agreement -- and do I have to sign one to keep my job?
An arbitration agreement is a contract in which you agree to bring any legal claims you may have against your employer to arbitration, rather than filing a lawsuit in court. Unlike civil court, where matters are decided by judges and juries, an arbitration takes place before an arbitrator who is chosen by the parties. The parties often don't have access to as much information from the other side as they would in a lawsuit, and the arbitrator's decision can rarely be appealed. For these reasons, arbitration is generally seen as more favorable to employers, which is probably why many employers ask new employees to agree to the process up front. Most courts have found that an employer can refuse to hire employees who refuse to sign an arbitration agreement, as long as the agreement isn't blatantly one-sided in the employer's favor. For information on arbitration agreements and tips on negotiating with your employer for a fairer shake, see Nolo's article Signing an Arbitration Agreement With Your Employer.