Arbitration Clauses in Employment Agreements
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If you have an employment agreement, there is a good chance it includes an arbitration clause. Sometimes even if you do not have a contract, your employer will have an arbitration or dispute resolution policy that you have to sign or click to accept as part of your onboarding to a new job.
You may not have much choice, as a practical matter, in whether you accept such a clause or policy. It is still important to understand what these provisions mean, and the extent to which they can be enforced. |
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Arbitration Defined
Arbitration is one alternative to litigating a claim in court. It is a form of alternative dispute resolution, but should not be confused with mediation.
An arbitration is still a form of a trial, it just occurs in a private setting before one or more arbitrators. Though arbitrators are often retired judges, this is not required, and you may have an arbitrator who is an attorney but not a judge.
There are advantages and disadvantages to arbitration from the employee's perspective. On the one hand, it is not a public proceeding, so you do not have to worry about people outside of the dispute learning that you brought a claim, or learning any of the details.
On the other hand, because it is a private proceeding, the parties usually share the costs for the arbitrator(s). This is a sometimes significant out of pocket expense that you would not have to bear if you filed a complaint in court.
Additionally, discovery (your right to gather information from the other side that may help you to prove your case) is usually more limited in arbitration, because the purpose of arbitration is to streamline matters and reach a result more quickly than you might in court. In employment cases, where the employer usually has access to more information than the employee, this can be a real disadvantage.
An arbitration is still a form of a trial, it just occurs in a private setting before one or more arbitrators. Though arbitrators are often retired judges, this is not required, and you may have an arbitrator who is an attorney but not a judge.
There are advantages and disadvantages to arbitration from the employee's perspective. On the one hand, it is not a public proceeding, so you do not have to worry about people outside of the dispute learning that you brought a claim, or learning any of the details.
On the other hand, because it is a private proceeding, the parties usually share the costs for the arbitrator(s). This is a sometimes significant out of pocket expense that you would not have to bear if you filed a complaint in court.
Additionally, discovery (your right to gather information from the other side that may help you to prove your case) is usually more limited in arbitration, because the purpose of arbitration is to streamline matters and reach a result more quickly than you might in court. In employment cases, where the employer usually has access to more information than the employee, this can be a real disadvantage.
Enforcement of Arbitration Agreements
Generally, agreements to arbitrate are enforced. The policies underlying the Federal Arbitration Act favor arbitration, as it is a private proceeding that generally moves faster and relieves burdens on the court system. Though there are some exceptions (described below) you should be aware that if you sign or accept an arbitration provision, you most likely are giving up your right to a trial before a jury should claims ever arise from your employment relationship.
Arbitration Agreements and Employment Discrimination Claims
One exception to the above rule is employment discrimination claims. An arbitration agreement can preclude you from bringing a case in court, but it cannot deprive the Massachusetts Commission Against Discrimination ("MCAD") or the federal Equal Employment Opportunity Commission ("EEOC") of jurisdiction to enforce the anti-discrimination laws.
What this means is that you can still bring a charge of discrimination to the MCAD or the EEOC, even if you have an arbitration agreement. The difference is that you have to stay in the agency you filed in, and cannot later remove the case and re-file in court, as you could if you were not bound by an arbitration clause.
What this means is that you can still bring a charge of discrimination to the MCAD or the EEOC, even if you have an arbitration agreement. The difference is that you have to stay in the agency you filed in, and cannot later remove the case and re-file in court, as you could if you were not bound by an arbitration clause.
Arbitration Agreements and Sexual Harassment Claims
A recently passed federal law also precludes enforcement of an arbitration agreement if you are bringing claims for sexual harassment or sexual assault. Because sexual harassment is a form of discrimination, you would still need to file first in the MCAD or the EEOC. But for these claims, because the law takes them outside of the arbitration agreement, you will still have the right ultimately to bring your case to a judge or jury in civil court.
Digitally Signed Arbitration Agreements
If you have a written employment agreement, or are presented with one to review, it is easy to tell if there is an arbitration clause. It is usually later in the document, and called something like "arbitration" or "dispute resolution."
It gets trickier when the employer has a policy that you are asked to sign off on as part of your onboarding process. You may be paging through many different documents, some of which may have a "click to accept" button but do not directly show you what you are accepting. There has been much debate about the extent to which these should be enforced. The Massachusetts Supreme Judicial Court has recently articulated a two part test,. under which the employer must have provided "reasonable notice" of the terms of the agreement, and a "reasonable manifestation of intent" by the employee clicking the button.
"Reasonable notice" does not require that the entire agreement be on the screen in front of you before you accept. It does, however, require that there be a clear way to link to review the document, and that the words on the screen make it clear that you are accepting a contract that is available to you to read. Things like clear hyperlink colors, and language in the button you are clicking that makes it clear you are agreeing to something, would support an argument that you had "reasonable notice."
Reasonable manifestation of assent: if the button you are clocking says "I agree" or "I accept," or words to that effect, a court will likely find you manifested your assent to the agreement. More indirect language, like text saying that submitting your electronic documents amounts to agreeing to all of the employer's policies, may be more carefully scrutinized.
It gets trickier when the employer has a policy that you are asked to sign off on as part of your onboarding process. You may be paging through many different documents, some of which may have a "click to accept" button but do not directly show you what you are accepting. There has been much debate about the extent to which these should be enforced. The Massachusetts Supreme Judicial Court has recently articulated a two part test,. under which the employer must have provided "reasonable notice" of the terms of the agreement, and a "reasonable manifestation of intent" by the employee clicking the button.
"Reasonable notice" does not require that the entire agreement be on the screen in front of you before you accept. It does, however, require that there be a clear way to link to review the document, and that the words on the screen make it clear that you are accepting a contract that is available to you to read. Things like clear hyperlink colors, and language in the button you are clicking that makes it clear you are agreeing to something, would support an argument that you had "reasonable notice."
Reasonable manifestation of assent: if the button you are clocking says "I agree" or "I accept," or words to that effect, a court will likely find you manifested your assent to the agreement. More indirect language, like text saying that submitting your electronic documents amounts to agreeing to all of the employer's policies, may be more carefully scrutinized.
How Our Employment Lawyers Can Help
We can help you review your employment agreement to make sure you are making an informed decision and protect your interests, or help you assess how you might proceed with claims against your employer if you have an arbitration agreement. You can use the button below to schedule a call back from a member of our team, or give us a call at 781-784-2322.
