Despite recent efforts to limit the reach of private arbitration agreements to resolve employment disputes, the use of mandatory arbitration agreements remains an attractive option for employers to avoid the pitfalls of courtroom litigation.
Broadly speaking, when an employee wants to file a legal claim against their employer, the employee has two basic avenues for relief. For some types of claims, the employee may file a civil lawsuit in a trial court. For some other types of claims, the employee has a right to file a complaint or charge with an appropriate governmental administrative agency (more on that later).
If an employee files a civil lawsuit in a trial court, the impact on the employer can be significant. The process is often long and time consuming. After months of “discovery”, e.g. depositions and document productions, it may take a year or longer to go to trial. With some exceptions, much of the information revealed in discovery will be available to anyone. The trial itself will be open to the public. Often juries are primarily comprised of employees, not employers, so employers may be concerned about jury bias. Employers worry that a “runaway” jury may award unreasonable damages to a sympathetic employee. After a trial, the losing party may file multiple appeals, which can last for years.
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