Arbitration

It has become increasingly common for employers to include arbitration agreements in their contracts with employees. Arbitration replaces court action in disputes between the employee and the employer. Instead, both parties plead their case in front of a private arbitrator, who is generally paid for by the employer. Arbitration agreements waive the employee’s right to have a public trial in front of a state or federal judge, as well as the right to a jury. The arbitrator’s decision is binding and almost always unappealable. Arbitrators have the power to award monetary damages or other remedies.

There are both positives and negatives to arbitration for employees. In most situations, the mandatory arbitration agreement will require the employer to pay for the arbitrator, and employers are often required to pay employees’ attorney fees if the employee wins the case. Additionally, solving disputes through arbitration can sometimes be cheaper and faster than going to the courts, and offers just as much, if not more, finality as a court decision. However, there are also many drawbacks for the employee. For example, arbitration is usually confidential and heavily slanted in favor of the employer, who pays the arbitrator’s hourly salary. Arbitration decisions are usually not appealable, and they do not rely on precedent. Further, arbitrators may be industry insiders or former defense attorneys. The arbitrator selected to arbitrate your case may have worked with your employer extensively in the past, either in private practice or as an arbitrator in other disputes. Additionally, agreeing to mandatory arbitration means giving up many of the rights available to you in the court system—including the right to a trial by jury and the multiple levels of appeal that are usually available. Austin Employment Lawyers, P.C.’s Austin arbitration lawyers can help you navigate these drawbacks and protect your rights in front of an arbitrator.

Generally, employees who consent to arbitration do so by signing an agreement to arbitrate before any dispute arises. It is also common for such arbitration agreements to be a mandatory condition of employment. Additionally, the Texas Supreme Court has also ruled that if an employer notifies at-will employees that it is adopting an arbitration program, those employees bind themselves to that arbitration program merely by continuing their employment. An affirmative agreement to the program is not required—in order to opt out of the arbitration agreement, the employee would have to leave that employer. Other common ways that employers bind employees to arbitration of disputes is by including such an agreement in the policy handbook.

Although in practice arbitration agreements can prevent an employee from suing an employer in court, an arbitration agreement can only bind those two parties to that agreement. That is particularly important for employees who exhaust administrative remedies through the EEOC. That is because the EEOC is not bound to arbitration even when the worker filing the claim is, and can sue employers in court and claim compensation on behalf of victims of discrimination. If you have a claim for workplace discrimination that your employer is requiring you to resolve through arbitration, it is worthwhile to involve the EEOC in the case. If the EEOC determines that you have been discriminated against, it can pursue compensation on your behalf that you would otherwise not be able to receive.

Your employer will almost certainly retain a lawyer to represent them during arbitration, and you will likely be at a serious disadvantage if you choose to represent yourself. Working with one of our Austin arbitration lawyers will allow you to navigate a complicated process with the assistance of an experienced and knowledgeable attorney. If you are involved in a dispute with your employer, and the case is proceeding to arbitration, you can contact us by filling out our intake form or calling our office at (512) 271-5527.