Understanding Arbitration Clauses in Employment Agreements
Demystifying Employment Arbitration Agreements
In the realm of employment agreements, the mention of an arbitration clause is quite common. Even if you don't have a formal contract, your employer might require you to sign or acknowledge an arbitration or dispute resolution policy as part of your onboarding process.
The reality is that you might not have much room to negotiate when it comes to these clauses, but it's still crucial to grasp their implications and the extent to which they can be enforced.
Arbitration, a form of alternative dispute resolution, is an alternative to taking a claim to court. It's essential to distinguish arbitration from mediation, as they are not the same. Arbitration resembles a trial, but it occurs in a private setting before one or more arbitrators, who may or may not be retired judges.
From an employee's perspective, arbitration has its advantages and disadvantages. On one hand, it's not a public proceeding, which means that you don't have to worry about outsiders learning about your dispute or its details. On the other hand, it comes with costs, as the parties involved usually share the expenses related to the arbitrator(s). This is an out-of-pocket expense you wouldn't incur if you opted for a court complaint. Additionally, arbitration typically limits the discovery process, which can be a disadvantage, especially in employment cases where employers often have greater access to information than employees.
Enforcing Arbitration Agreements
In general, agreements to arbitrate are legally binding and enforceable. The Federal Arbitration Act promotes arbitration as a private, streamlined process that reduces the burden on the court system. While there are some exceptions to this rule (which we'll discuss shortly), signing or accepting an arbitration provision often means you're relinquishing your right to a trial before a jury should employment-related claims arise.
Arbitration Agreements and Employment Discrimination Claims
There's an exception to the enforceability of arbitration agreements when it comes to employment discrimination claims. Although an arbitration agreement can prevent you from pursuing a case in court, it can't deprive the Massachusetts Commission Against Discrimination (MCAD) or the federal Equal Employment Opportunity Commission (EEOC) of their jurisdiction to enforce anti-discrimination laws. This means you can still file a discrimination charge with the MCAD or EEOC, even if you've signed an arbitration agreement. However, you'll need to remain in the agency where you initially filed your claim; you won't have the option to transfer the case to court.
Arbitration Agreements and Sexual Harassment Claims
Recent federal legislation further limits the enforceability of arbitration agreements, specifically concerning sexual harassment or sexual assault claims. Since sexual harassment is a form of discrimination, you're still required to file with the MCAD or EEOC first, even if you have an arbitration agreement in place. However, these claims fall outside the scope of the arbitration agreement, allowing you to ultimately bring your case before a judge or jury in civil court.
Digitally Signed Arbitration Agreements
While it's relatively straightforward to spot an arbitration clause in a written employment agreement, it can be trickier when an employer requires you to accept an arbitration or dispute resolution policy digitally during onboarding. You might be presented with multiple documents, some of which don't directly show what you're accepting, making it a challenging situation.
The enforceability of these digitally signed agreements is still a subject of debate. The Massachusetts Supreme Judicial Court has recently outlined a two-part test that must be met. First, the employer must have provided "reasonable notice" of the agreement's terms. Second, the employee must have shown a "reasonable manifestation of intent" when clicking the acceptance button.
"Reasonable notice" doesn't necessarily mean that the entire agreement must be visible on your screen before you accept. However, there should be a clear way for you to access and review the document, with language indicating that you are accepting an available contract. Clear hyperlink colors and language in the acceptance button can support the argument that you had "reasonable notice."
The "reasonable manifestation of assent" is typically fulfilled if the button you're clicking says something like "I agree" or "I accept." More indirect language, such as stating that submitting electronic documents equates to agreeing to all of the employer's policies, may face closer scrutiny.
Understanding these facets of arbitration clauses and agreements can help you navigate the complex terrain of employment contracts while staying informed about your rights and options.
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