Arbitration & the Employee Under California Employment Law

Here are the typical questions that employees ask and have the right to know the answers:

Q: What is an arbitration agreement?

A: In theory, it is an agreement where opposing parties choose a private individual to decide the case rather than go to court and have it decided by a judge or a jury.

Q: What is the disadvantage to the employee under an arbitration agreement?

A. The employee is deprived of the right to have the case decided and evaluated by a jury.

Q. What is the disadvantage to the employee of having an arbitrator decide the case?

A. Because the arbitrator usually is a retired judge and is in favor of employers and even when the arbitrator finds in favor of the employee, the damages will be significantly lower.

Q: Isn’t it that the arbitrator is chosen by a mutual agreement of the employee and the employer?

A: Only in theory, but not in fact. Under California law, the arbitration fees are paid by the employer. An arbitrator who has a history of deciding in favor of the employee will be black balled by the employer.

Q: Can the employer force the employee to arbitrate even though the employee has not agreed to an arbitration?

A: Yes. The employer has the right to set the terms and conditions of employment. One of those conditions of employment is to require an arbitration in the event of a dispute.

Q: Has the right of the employer to unilaterally impose the arbitration agreement on the employee been tested in court?

A: Yes. Under the Federal Arbitration Act, such agreements are favored, and Federal law supersedes state law. Therefore, imposed agreement will be upheld.