Some employers have embraced the use of employment arbitration agreements as a way to manage and mitigate the rising costs, risks and liabilities associated with employment-related claims. Historically, employment arbitration agreements require employees to present employment-related claims, such as employment discrimination, wrongful discharge, harassment, or claims for wages or compensation to an arbitrator, in lieu of proceeding to court. Plaintiff’s lawyers have attempted, sometimes with success, to invalidate employment arbitration agreements. Consequently, some employers have become less willing to adopt them.
Recent court decisions significantly increase the enforceability of employee arbitration agreements, and also make enforceable a properly drafted waiver of an employee’s right to file a class action in court. Such “class action waivers” in arbitration agreements may enable an employer to avoid the tremendous expense and potential liability posed by discrimination and unpaid wage class actions filed in the courts.
Originally published in Oregon Business on October 12, 2013.
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