WHAT IS FORCED ARBITRATION?Last updated on: October 28, 2022
Legal action can be time-consuming and expensive for all parties involved, especially when a case goes to trial. Many companies want to avoid the possibility of a lawsuit going to trial as much as possible, which leads many of them to use forced arbitration clauses with their employees to limit the legal options available in the event of a personal injury claim.
Forced arbitration sounds intimidating, but it doesn’t mean you are entirely bereft of legal options. If you or a loved one is considering agreeing to a forced arbitration clause, or you have questions about a personal injury claim in light of a forced arbitration clause, you can contact the lawyers at Zinda Law Group today for a free case consultation.
WHAT IS THE DEFINITION OF FORCED ARBITRATION?
Forced arbitration is also sometimes called mandatory arbitration. In either case, it describes an agreement between two parties, usually an employee and an employer, that in the event of a legal issue arising between them the parties will resolve the dispute in front of an arbiter instead of going to court.
Generally, an employee will agree to a forced arbitration clause folded into a more general employment contract. So if an individual does not carefully read all the terms of their employment contract, they may not even know that they have agreed to forced arbitration until it becomes relevant.
Forced arbitration is not just for employer-employee relationships. Many service providers also have forced arbitration clauses which consumers agree to by agreeing to terms and conditions.
WHAT ARE YOUR OPTIONS WHEN PRESENTED WITH A FORCED ARBITRATION CLAUSE?
Obviously, you have the right to voluntarily enter into whatever legal contracts you choose. However, if a forced arbitration clause is part of a contract, it is perfectly lawful for the employer or service provider to make the benefits of the contract (like employment, or receiving the service) contingent on agreeing to that or any other clause. If you refuse to sign the arbitration clause, the other party may just discontinue the business you had with them.
You also have the option to attempt to modify the arbitration agreement. Of course, you won’t have much luck contacting Apple to ask for a change to their terms of service, but if you are offered a job it may be possible to have some aspects of the arbitration clause changed, although you aren’t guaranteed success. For example, you may ask for the location of the arbitration to be in your home state and not the state the company is headquartered in, or that the company agrees to pay all arbitration costs.
You can also sign the arbitration clause as it is presented to you. Be sure to read the clause carefully, and if you have any questions, you can also show it to a lawyer for a more thorough explanation of your legal rights.
HOW DOES AN ARBITRATION CLAUSE WORK?
When you sign an arbitration clause, you are agreeing to give up your right to take any legal issues that may arise to court. Essentially, you are agreeing that whatever legal issues come up, you will address them in arbitration.
Arbitration is an alternative to solving a dispute in the courtroom, it’s faster and less expensive. Both parties appear before an arbiter, who is a neutral party and does not have to be a licensed attorney or a judge.
The arbiter will hear testimony from both sides of the dispute and then come to a decision, and due to the arbitration clause, both parties have agreed to be bound by whatever decision the arbiter makes.
WHAT ARE THE PROS AND CONS OF ARBITRATION?
PROS OF ARBITRATION
- Faster and Less Expensive
Because there is no waiting for a judge or jury, or for a case to go through the legal system, you are going to get a result much quicker with arbitration.
Unlike a trial, where the result can be public, arbitration is usually confidential and done privately.
CONS OF ARBITRATION
- No Appeal Process
Arbitration agreements generally involve the two parties agreeing to be bound by what the arbiter has decided, giving up any future right to contest the decision, unlike lawsuits, which can be appealed.
- Harder For Employees
Employees are more likely to lose with arbitration than with lawsuits. The quickness of the process can be a problem as well as a positive—it means you will have less time to gather your evidence and present your case, and the rules for what can be presented as evidence are stricter as well.
This can be a good thing, but it can also be a bad thing. Companies can avoid bad press and publicity about their internal affairs, even in situations such as discrimination cases where that privacy is used to allow and perpetuate bad situation.
ARE FORCED ARBITRATION CLAUSES STILL LEGAL IN 2022?
Forced arbitration clauses are still legal in 2022, and in fact they have been strengthened in recent years, such as by the 2018 Supreme Court case Epic Systems Corp. v. Lewis. The Court ruled that clauses that prohibit lawsuits, such as forced arbitration clauses, can be legally enforced against both individual lawsuits and class action suits.
However, not everything can be arbitrated. In 2022, President Joe Biden signed a bill ending forced arbitration for those who experience workplace harassment or sexual assault. This means that these issues can be brought in a lawsuit, and a company cannot force a victim to arbitration.
WHAT TYPE OF CASES COME UNDER ARBITRATION?
Many forced arbitration contracts will want to be as broad as possible with their coverage of potential legal issues, and many specify that any legal issue that arises will be handled by forced arbitration.
Of course, the most commonly arbitrated cases are the legal issues that most commonly arise—injury cases, whether workplace safety or product liability, or employment problems, such as discrimination.
WHAT ELSE SHOULD I DO IF I’M NOT SURE HOW TO PROCEED?
If you have agreed to a forced arbitration clause and you’re wondering what to do next, you could contact an arbitration lawyer. You are not required to have a lawyer for arbitration, but it is allowed, and it could really help your case.
An arbitration lawyer will know how to navigate the arbitration process and make a strong case to the arbiter.
In addition, the company is sure to have legal representation for their own interests. If you also have an arbitration lawyer, you will not have to deal with a legal professional on your own.
HOW LONG DOES AN ARBITRATOR HAVE TO MAKE A DECISION?
Unlike a court case, where sentencing could happen even months after the close of the trial, arbiters make their decisions much more quickly.
An arbiter reaches a decision typically within 14-30 days after the end of the arbitration hearing.
SHOULD I CONSULT WITH A LAWYER FIRST?
If you are entering into arbitration with a company, it would be a good idea to consult a lawyer. They’ll ensure that the arguments and evidence you are presenting are as strong as they can be, and make you aware of all of the legal impacts of the arbitration clause and other aspects of the arbitration process.
You should also speak to a lawyer if you have a matter you believe could be litigated, but you know you are bound by a forced arbitration clause. Your lawyer will be aware of the most up-to-date rulings and regulations surrounding forced arbitration, a topic that does sometimes go through chances such as the 2022 bill to exclude sexual harassment cases.
GET HELP FROM ARBITRATION LAWYERS TODAY
Forced arbitration can make you feel like you don’t have any options with your personal injury claim, but that isn’t true. Competent legal representation can help you make sure you know all possible actions to take with regards to a forced arbitration clause.
If you are facing an arbitration or want to know about the consequences and options available to you regarding a forced arbitration clause, you should contact the arbitration lawyers at Zinda Law Group today.
The lawyers at Zinda Law Group have carried out arbitration proceedings for numerous clients, and their No-Win, No-Fee Guarantee means that you will pay nothing unless you receive a favorable verdict.