arbitration process

Crucial Aspects You Should Know When it Comes to Arbitration

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Upholding a brand’s name is among the vital undertakings of all businesses. As such, companies will go all out to quash anything that might lower the public’s view of their brand. Even so, conflicts are frequent in workplaces, just like in all places where people from different backgrounds interact. Court battles trying to solve different issues might significantly affect the public’s perception of your company and leave you grappling with substantial financial losses.

To keep work-related issues out of court, most employers ask mediation on employment law. Here, you and your employer will sit with a mediator well-versed in employment law and reach a decision that works for both parties. Alternatively, you can sort the issue through arbitration. Here, a third party will listen to your problems then come up with the best solutions. The conclusion might not be one that works for both parties, but it is the most effective, considering the case at hand. Most employers require employees to sign an arbitration agreement when getting employed to guarantee any conflict will be solved through arbitration rather than litigation. The following are the details you should consider when you enter negotiations in an arbitration agreement.

The Arbitrator

Most employers will control the arbitrator that you will use in case you have to resolve a labor conflicts. This puts you at a disadvantage when resolving issues later. Ensure you are comfortable with the arbitrator chosen and that he/she will be impartial. You can also recommend your arbitrator so that both of you contribute to the choice.

Information Disclosure by an Arbitrator

lawyer showing documents to clientsThough fraudulent and underhanded, an arbitrator at times has vested interests that might cause him/her to rule in an employer’s favor. As such, ensure your arbitration agreement includes a clause that demands the disclosure of any vested interests by an arbitrator. He/she, for instance, might have shares in the company. You have as much right as your employer to reject an arbitrator with a conflict of interest owing to a relationship with either party in an employment contract.


Before signing an agreement, ensure you know who will meet an arbitrator’s fee. In most cases, it is only fair for an employer to meet these costs. Some companies nonetheless call for a 50-50 split of the cost between conflicting parties.

Right to Claiming Damages

In most cases, employers will limit their employees’ right to claim damages for wrongdoing in arbitration. This way, they define what they will pay in compensation. Ensure you are not limited in the amount or type of damages you can claim in arbitration. Check that you are allowed to pursue compensatory and punitive damages and those related to emotional distress if need be, and there is no monetary limit to the same.

When signing an employment contract, most people do not negotiate because they might lose their jobs or create a wrong impression. Even so, accepting an employer’s terms for the above arbitration agreement aspects at face value might prove costly in the future. This is because you might have little or no recourse for conflict resolution or be disadvantaged in the process.

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