forced arbitration

When you get a new job, you’ll likely receive a stack of forms and an employment agreement to read and fill out.

You might also receive these documents after years of work.

Reading these forms and agreements carefully is important because your signature can mean a waiver of fundamental rights. 

Among the provisions tucked away in many employment contracts, employee handbooks, and other onboarding documents are mandatory arbitration agreements.

These agreements force employees to forego civil lawsuits and resolve workplace complaints through arbitration. These agreements are often more beneficial to an employer than an employee, but it depends on the circumstances. 

It can be challenging to know when to sign a forced arbitration agreement and when to walk away from a work opportunity.

An experienced lawyer can help you make the best decision. Our award-winning employment attorneys at O’Connor, Parsons, Lane & Noble, LLC, can help protect your rights and help you make the best legal decisions for yourself and your career. 

What Is Arbitration? 

Arbitration is a form of alternative dispute resolution. Arbitration takes disputes out of the courtroom and places them in front of a third-party decision-maker called an arbitrator. An arbitrator acts like a judge but doesn’t have to be a lawyer.

All parties to a dispute present their evidence and statements to the arbitrator. The arbitrator then makes a decision about how to resolve the dispute. In binding arbitration, the parties must follow the arbitrator’s decision. 

If one party doesn’t follow a binding arbitration decision, the other party can take them to court to enforce it. This is the only time parties to binding arbitration can use the courts in many cases.

Binding arbitration decisions are often unappealable (unlike trial awards), so many unhappy parties have no recourse to change bad decisions from arbitrators. 

Common Uses for Arbitration

Arbitration agreements pop up in many kinds of transactions and scenarios, including:

  • Agreements for the sale of goods,
  • Contracts for professional services,
  • Insurance contracts, 
  • Personal injury cases, and 
  • Workplace disputes.

In fact, New Jersey law makes arbitration mandatory for certain personal injuries, automobile negligence, insurance debt, and commercial cases. In these cases where state law makes arbitration mandatory, arbitrators must be lawyers or retired Superior Court judges.

For cases where the state doesn’t make arbitration mandatory, parties might have to present their cases to arbitrators who aren’t attorneys or judges. 

Legal Representation for Arbitration

Arbitration frequently allows both parties to have an attorney. Take advantage of this option if you can. You can increase your chances of winning in arbitration with a skilled attorney by your side.

What Is Forced Arbitration in the Workplace?

Whether an employment dispute will arise in any business or workplace is usually a matter of “when” and not “if.” Employers often use arbitration clauses to gain more control over the resolutions of disputes. Mandatory arbitration agreements help employers avoid litigation expenses, make dispute resolution quicker, make disputes confidential, and bolster the employer’s chances of winning.

In fact, nearly 60 million workers in the United States are currently subject to one of these agreements. If you signed a mandatory arbitration agreement and you have a disagreement with your employer about your wages, a non-compete agreement, your intellectual property, etc., you will likely have to argue your case in front of an arbitrator in a conference room instead of a judge in a courtroom. 

The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act

Fortunately, your employer can no longer force you to handle sexual harassment complaints in arbitration.

On March 3, 2022, the president signed into law the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act. This act invalidates mandatory arbitration clauses in employment agreements when it comes to sexual assault and sexual harassment complaints.

If you suffer an incident of workplace sexual misconduct on or after March 3, 2022, you are free to take your case to court. You could do this even if you signed a mandatory arbitration agreement before the incident.

After sexual harassment or sexual assault occurs at work, you can sign and be bound by a voluntary arbitration agreement. It’s your choice whether you want to handle your complaint in court or arbitration. This change is a significant development in the law. 

Many businesses and employers force arbitration so they can choose their own industry experts to be arbitrators. Unfortunately for a wronged employee, an employer-selected industry expert is often someone who sees matters the way the employer does.

Under these circumstances, even the beginning of a forced arbitration hearing can be a losing battle for an employee. But taking sexual misconduct cases away from the arbitration table gives victims the opportunity to have their case decided by an impartial jury or judge who does not work for the employer’s industry.

Additionally, victims of misconduct might have more options for the discovery of evidence in civil court compared to forced arbitration. The new act also invalidates class-action lawsuit waivers for sexual misconduct cases. Class-action lawsuits give victims the option to pool resources to bring group complaints against wealthier and unscrupulous employers. 

Forced Arbitration and Other Employment Discrimination

Mandatory arbitration clauses are still valid when it comes to many other workplace discrimination complaints. Through a 2019 amendment to the New Jersey Law Against Discrimination (NJLAD), the State of New Jersey invalidated mandatory arbitration agreements for workplace discrimination cases.

This amended law’s effect on many arbitration agreements didn’t last long. On February 15, 2022, the New Jersey Appellate Division handed down a decision in Antonucci v. Curvature Newco, Inc. The decision stated that the Federal Arbitration Act (FAA) invalidated NJLAD laws against mandatory arbitration agreements.  

If you signed a mandatory arbitration agreement that covers discrimination complaints and that is subject to the FAA, you have to resolve your workplace discrimination complaints in arbitration.

If you’re unsure whether this rule of law applies to your workplace dispute, you should speak to an experienced employment lawyer immediately. 

Our Attorneys Can Help You

At O’Connor, Parsons, Lane & Noble, our skilled lawyers work hard to protect the New Jersey community and its workers. Our success in protecting wronged New Jersey employees is unparalleled.

We have won millions for New Jersey employees, including winning the highest verdict in New Jersey history for a single plaintiff. Whether you need an attorney to review an employment agreement or represent you in court or arbitration, we can answer the call.

You don’t have to face an employment dispute or dilemma alone. Give us a call or contact us online for a free consultation. We are ready to fight for you.

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