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  • What you need to know before signing an Arbitration Agreement

    July 06, 2022

    Employment Law

    Has your employer asked you to sign an Arbitration Agreement?

    Many companies are presenting new and current employees with arbitration agreements due to recent law interpretations. These agreements can be complicated and confusing – before you agree to sign them it is important to understand how they impact your rights. We’ve outlined below what you need to know before signing an arbitration agreement.

    Importantly your employer can not retaliate against you for refusing to sign an arbitration agreement – before you sign an arbitration agreement contact us. Call (800) 437-7991 now and we’ll be able to review your agreement and help you secure your rights.

    What is an arbitration agreement?

    Typically, an arbitration agreement is a clause in a broader contract where you agree to settle out of court through arbitration if any disputes arise with your employer.

    What is Arbitration? 

    Arbitration is a procedure where parties, in this case you and your employer, settle disputes by going to a neutral 3rd party, usually a retired judge instead of suing them in court.  Employers love arbitration because they get to tip scales in their favor.  First, arbitrations are usually private, which means no matter how egregious the violation you are complaining about, they don’t have to worry about bad publicity.  Second, most arbitration procedures allow only limited “discovery,” or the right to collect evidence from the other side, so you may not be able to prove your side of the story.  Finally, they often require you to deal with only your individual grievances, and do not typically allow you to combine claims or apply penalties for others. 

    Can my employer fire me or choose not to hire me if I don’t sign the arbitration agreement?

    Fortunately, you don’t have to sign an arbitration agreement.  AB51, a law that went into effect in California in 2020, makes it unlawful for an employer to require you to sign an Arbitration Agreement as a condition of employment.  Under this law, an employer cannot deny you employment or retaliate against you in any way for refusing to sign one.  

    BUT, you have to know your rights.  The same law also says that such an agreement is valid and enforceable if you sign it, even if they unlawfully made it a requirement.  Once you sign it, it may be too late to get out of it, even if you did not know it was illegal to require you to sign it. 

    Some exceptions and nuances to this exist.  If you have questions about arbitration agreements, or think you may have signed one and are concerned what your rights may be, Call (800) 437-7991 now to schedule a free consultation about how to proceed with your case.

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