The Arbitration Clause Employment Contract serves as a crucial risk management tool for U.S. employers seeking to avoid costly litigation and ensure efficient dispute resolution. This document becomes necessary when organizations wish to establish arbitration as the primary method for resolving employment-related disputes. It must comply with federal laws, including the Federal Arbitration Act, and applicable state regulations. The clause typically covers various workplace disputes, from discrimination claims to wage disputes, while potentially excluding certain matters like workers' compensation claims.
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1. Parties: Identification of employer and employee
2. Background: Context of employment relationship and purpose of arbitration agreement
3. Definitions: Key terms used in the arbitration agreement including 'Arbitration', 'Claims', 'Dispute'
4. Agreement to Arbitrate: Core provision establishing mutual obligation to arbitrate disputes
5. Scope of Arbitration: Detailed description of claims covered and excluded from arbitration
6. Arbitration Procedures: Process for initiating and conducting arbitration, including selection of arbitrator
7. Costs and Fees: Allocation of arbitration expenses between parties
8. Governing Law: Specification of applicable law and jurisdiction
1. Class Action Waiver: Optional provision waiving right to participate in class or collective actions
2. Confidentiality: Optional provisions regarding confidentiality of arbitration proceedings
3. Discovery Procedures: Optional detailed rules for information exchange during arbitration
4. Severability: Optional clause addressing survival of agreement if certain provisions are found invalid
1. Schedule A - Arbitration Rules: Detailed procedural rules governing the arbitration process
2. Schedule B - Fee Schedule: Detailed breakdown of arbitration costs and their allocation
3. Schedule C - Excluded Claims: Comprehensive list of claims specifically excluded from arbitration requirement
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