How To Explain An Arbitration Agreement

Since arbitration is a contract-based dispute resolution mechanism, there may be steps defined in the contract that must be followed before arbitration can begin. These may be meetings between high-level people within the two organizations in order to try to resolve the dispute or to publicize them. Arbitration policies are generally as follows, write Sarah Rudolph Cole and Kristen M. Blankley in their chapter “Arbitration” in The Handbook of Resolution (Jossey-Bass, 2005). Together, the parties select an arbitrator from a list provided by an arbitration registry. The arbitration will take place in a private conference room and not in a public courtroom. The arbitrator begins to present the ground rules; then each party makes an opening statement, or its lawyers do. As a result, most forced arbitration agreements now expressly provide that there is no limitation on the claims or damages that the employee can receive. Any limitation of the remedies that would have been made available to the worker before the courts considerably increases the likelihood that the agreement will be annulled by the courts. They are often a few sentences and are often found towards the end of a broader contract under a title such as “arbitration” or “Dispute Resolution”.

Personnel arbitration agreements can be buried in an employment contract or an employee manual. An arbitration clause generally states that all disputes arising out of the broader contract are subject to mandatory arbitration. Sometimes a contract will say that only certain disputes are arbitral. .