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ABA Family Legal Guide
Law and the Workplace
Leaving a Job
Being Fired
How are employee disputes involving termination commonly resolved?
Recently, employers have been turning to arbitration as the forum for resolving employment disputes, especially those involving termination. Arbitration is a quasi-judicial procedure in which a neutral third party presides over a hearing. At the hearing, the disputing parties present their claims, the evidence in support of their claims, and their arguments. The arbitrator then issues a final and binding decision that resolves the dispute. Many employers believe the process is faster, cheaper, and eliminates the risks associated with a jury deciding a case. Accordingly, some employers are requiring employees to sign arbitration agreements before they are hired, or as a condition of continued employment. By signing an agreement to arbitrate, employees are waiving their right to file a lawsuit in court, and agreeing instead that they will submit the dispute to arbitration. For example, employees who have signed a valid arbitration agreement, and subsequently believe they were fired because of their race, would not be able to pursue their claim by filing a lawsuit under Title VII in federal court. Instead, they would be required to present their claim to the arbitrator, and the arbitrator would decide if Title VII had been violated.
As a general rule, the courts will enforce an agreement to arbitrate if certain conditions are met:
Even a valid arbitration agreement cannot, however, prevent an employee from filing a charge with a government agency alleging a violation of the law. Thus, an employee who signed an agreement to arbitrate could still file a charge with the National Labor Relations Board (NLRB) or the Equal Employment Opportunity Commission (EEOC), though he or she might be precluded from filing a lawsuit.
Copyright © 2004 American Bar Association