Everything you must Know About Mandatory Arbitration

Mandatory Arbitration

Are you joining a new workplace? Well, it might be very thrilling for you. The excitement of starting a new job is incredible and it feels out of this world, to begin your career journey. However, in this bubble of excitement, you might not ready your employment contract closely. And that is where you will be making a huge mistake. This is one of the most important documents of your career journey and as the majority of people tend to overlook it, it is very crucial to have a deep insight into this. 

The employment document contains all the terms, conditions and policies that you will be working on. Thus, you must be responsible enough to know about all of them. You don’t want to sign on a contract that doesn’t suit your requirements or long term career plans. There is a lot that is involved in it. Thus, be careful while you sign it. 

What is Mandatory Arbitration? 

In the midst of all these important terms and conditions, there is the mandatory arbitration clause which is very important to know about and understand too. This clause basically limits the employees to take any argument or issue that they have with the workplace to the court. Whether it is about harrasment, discrimination, wage theft or improper dimsial; if this clause is present there, you wouldn’t be able to take the matter to the court. All the employees who get bound by this clause in their contract, have to settle their arguments with the employers privately. No matter what the issue, the employee won’t be able to look for legal help. Therefore, you must check your employee contract before signing it, whether this clause is present there or not. 

This is not a favourable clause for the employees and it can have bad consequences. Therefore, before you sign your employee contract, always look out for mandatory arbitration and make sure that you know what you are signing up for. Once you have signed the papers, you wouldn’t be able to undo it. 

You will probably get a mandatory arbitration in your career

If you assume that you wouldn’t have to face this clause in your life, at all; then you are wrong. You will certainly have to face this once in your career, for sure. More than 55% of the workers in the United States are subjected to this clause. The mandatory arbitration clause is more commonly present in large companies who don’t have a good pay scale. They are usually present in large amounts in California, Texas and North Carolina. 

A deeper insight to arbitration

There are some similarities found in arbitration that are also present in the public court system. In an arbitration there are two disputing parties who are putting forth their arguments, before a third party. The third party gives the final verdict. This is similar to what we experience in public court systems. However, the major key difference is that arbitrations are quick and smooth in making a decision. On the other hand, public court cases are slower. 

Arbitrations are more efficient and provide an outcome quicker than courts. Moreover, arbitrations are private unlike court hearings which are public. In an arbitration, there is no obligation for the parties to release any information. Furthermore, court hearings are decided with the help of juries and judges but in an arbitration, it is done by an arbitrator. Thus, you need to hire one accordingly and make sure that you are hiring the right person for it too. An arbitrator is usually a retired lawyer or judge who is paid by both the parties or at least one of the involving parties. 


People usually overlook their contracts before signing them. They don’t bother having a look at the various clauses that are included in it and later on, this can be a huge issue. Mandatory arbitration clause is gradually increasing in companies and it is best to go through your employment contract before you sign it. It is better to be safe rather than being sorry. Thus, check your contract thoroughly and read through each line closely.

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