Arbitration Clause For Employment Agreement for the United States

Arbitration Clause For Employment Agreement Template for United States

An arbitration clause for employment agreements is a legal provision used in U.S. employment contracts that requires both employer and employee to resolve certain disputes through arbitration rather than litigation. The clause must comply with federal laws including the Federal Arbitration Act and various state-specific requirements. It typically outlines the scope of arbitrable disputes, the process for selecting arbitrators, cost allocation, and procedural requirements while ensuring compliance with recent legislation such as the Ending Forced Arbitration Act of 2022.

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What is a Arbitration Clause For Employment Agreement?

The Arbitration Clause For Employment Agreement is a critical component of modern U.S. employment contracts, designed to provide a more efficient and cost-effective method of dispute resolution. It became increasingly common following several Supreme Court decisions upholding the enforceability of employment arbitration agreements. This document is typically used when companies want to avoid costly and time-consuming court litigation while maintaining confidentiality in dispute resolution. The clause must carefully balance employer interests with employee rights and comply with both federal and state laws, including recent restrictions on arbitrating sexual harassment claims.

What sections should be included in a Arbitration Clause For Employment Agreement?

1. Parties: Identifies the employer and employee entering into the arbitration agreement

2. Background: Explains the context and purpose of the arbitration agreement

3. Definitions: Defines key terms used in the agreement including 'Arbitration', 'Dispute', 'Claims'

4. Scope of Arbitration: Specifies which disputes are subject to arbitration and which are excluded

5. Arbitration Procedures: Details the process for initiating and conducting arbitration, including timeframes and requirements

6. Arbitrator Selection: Process for choosing the arbitrator and requirements for arbitrator qualifications

7. Cost Allocation: Specifies how arbitration costs will be shared between employer and employee

What sections are optional to include in a Arbitration Clause For Employment Agreement?

1. Class Action Waiver: Waiver of right to participate in class actions, including specific language required by federal law

2. Mediation Requirement: Optional requirement to attempt mediation before proceeding to arbitration

3. Confidentiality Provisions: Requirements for maintaining confidentiality of arbitration proceedings and outcomes

What schedules should be included in a Arbitration Clause For Employment Agreement?

1. Schedule A - Arbitration Rules: Detailed rules governing the arbitration process (typically incorporating AAA or JAMS rules)

2. Schedule B - Fee Schedule: Breakdown of arbitration fees and cost allocation between parties

3. Schedule C - Excluded Claims List: Comprehensive list of specific claims excluded from arbitration requirement, including statutory exclusions

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

United States

Publisher

Genie AI

Cost

Free to use
Industries

Federal Arbitration Act: Primary federal law governing arbitration agreements in the United States, establishing the enforceability of arbitration agreements in commercial and employment contexts

Title VII of the Civil Rights Act: Federal law prohibiting employment discrimination that must be considered when drafting arbitration clauses to ensure they don't infringe on protected rights

Americans with Disabilities Act: Federal law protecting rights of disabled employees that must be accounted for in arbitration provisions

Age Discrimination in Employment Act: Federal law protecting employees from age discrimination that must be considered in arbitration agreements

Fair Labor Standards Act: Federal law governing wages and hours that must be considered when determining scope of arbitrable claims

State Arbitration Laws: Various state-specific laws governing arbitration that may impose additional requirements or restrictions beyond federal law

Epic Systems Corp. v. Lewis (2018): Supreme Court precedent upholding the enforceability of class action waivers in employment arbitration agreements

Circuit City Stores v. Adams (2001): Supreme Court decision establishing that the FAA applies to employment contracts except for transportation workers

AT&T Mobility LLC v. Concepcion (2011): Supreme Court case supporting enforcement of arbitration agreements and class action waivers

Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act: 2022 federal law prohibiting mandatory arbitration of sexual assault and harassment claims

Unconscionability Requirements: Legal doctrine requiring arbitration agreements to be both procedurally and substantively fair to be enforceable

EEOC/NLRB Filing Rights: Employee rights to file complaints with federal agencies that must be preserved in arbitration agreements

Discovery Provisions: Requirements for ensuring adequate discovery procedures in arbitration process

Cost Allocation: Legal requirements regarding fair distribution of arbitration costs between employer and employee

Statute of Limitations: Time limits for bringing claims that must be reasonably preserved in arbitration agreements

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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