Employment Arbitration Policy for the United States

Employment Arbitration Policy Template for United States

An Employment Arbitration Policy is a legally binding document that establishes alternative dispute resolution procedures for employment-related conflicts in the United States. It outlines the process for resolving workplace disputes through arbitration rather than litigation, specifying the scope of covered claims, arbitrator selection process, cost allocation, and procedural requirements. The policy must comply with federal laws including the Federal Arbitration Act, as well as applicable state laws and recent Supreme Court decisions regarding employment arbitration.

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What is a Employment Arbitration Policy?

The Employment Arbitration Policy serves as a crucial risk management tool for U.S. businesses seeking to resolve workplace disputes efficiently and cost-effectively. This document becomes particularly important in today's litigious business environment, where companies aim to minimize exposure to costly court proceedings while maintaining fair dispute resolution processes. The policy must be carefully drafted to ensure compliance with federal and state laws, including recent legislation prohibiting mandatory arbitration of sexual harassment claims. It typically includes provisions for arbitrator selection, cost sharing, discovery rights, and the types of claims covered, while preserving essential employee rights and remedies.

What sections should be included in a Employment Arbitration Policy?

1. Purpose and Scope: Defines the intent and coverage of the arbitration policy, including reference to relevant federal and state laws

2. Definitions: Defines key terms used throughout the policy including 'Covered Claims', 'Arbitration', 'Company', and 'Employee'

3. Agreement to Arbitrate: Core provision establishing mutual agreement to arbitrate and acknowledgment of waiver of court proceedings

4. Covered Claims: Specifies which disputes are subject to arbitration and which claims are excluded

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

6. Selection of Arbitrator: Process for choosing neutral arbitrator and qualifications required

7. Discovery and Evidence: Rules regarding information exchange, document production, and admissible evidence

8. Costs and Fees: Allocation of arbitration expenses between employer and employee

9. Awards and Enforcement: Process for rendering and enforcing arbitration decisions

What sections are optional to include in a Employment Arbitration Policy?

1. Class Action Waiver: Optional provision waiving right to participate in class or collective actions, subject to state law restrictions

2. Opt-Out Procedure: Process and timeframe for employees to opt out of arbitration agreement, recommended for strengthening enforceability

3. Severability: Provision maintaining validity of remainder of policy if certain portions are found unenforceable

4. Modification of Agreement: Terms for how and when the policy can be modified by the employer

What schedules should be included in a Employment Arbitration Policy?

1. Acknowledgment Form: Form for employee signature acknowledging receipt and understanding of arbitration policy

2. Opt-Out Form: Standard form for employees to decline participation in arbitration program within specified timeframe

3. Arbitration Rules and Procedures: Detailed procedures often referencing AAA or JAMS rules for employment arbitration

4. Covered Claims Examples: Illustrative list of types of disputes that are and are not covered by the arbitration agreement

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

Cost

Free to use

Relevant legal definitions

Arbitration
Arbitrator
Claim
Company
Covered Parties
Dispute
Effective Date
Employee
Employment-Related Dispute
Excluded Claims
Party
Parties
Representative Action
Rules
Venue

Clauses

Scope of Agreement
Mutual Agreement to Arbitrate
Covered Claims
Excluded Claims
Arbitrator Selection
Arbitration Procedures
Discovery Rights
Confidentiality
Costs and Fees
Class Action Waiver
Opt-Out Rights
Notice Requirements
Severability
Governing Law
Amendment
Survival

Relevant Industries

Technology
Financial Services
Retail
Healthcare
Manufacturing

Relevant Teams

Human Resources
Legal
Operations
Compliance
Employee Relations

Relevant Roles

Human Resources Director
General Counsel
Chief Operating Officer
Department Managers
Compliance Officer

Industries

Federal Arbitration Act (FAA): Primary federal law governing arbitration agreements in the United States, establishing their validity, enforceability, and implementation

Title VII of the Civil Rights Act: Federal law prohibiting employment discrimination based on race, color, religion, sex, and national origin that must be considered in arbitration agreements

Americans with Disabilities Act (ADA): Federal law protecting rights of individuals with disabilities in employment context, which must be addressed in arbitration policies

Age Discrimination in Employment Act (ADEA): Federal law protecting workers 40 and older from employment discrimination, relevant for arbitration policy coverage

Fair Labor Standards Act (FLSA): Federal law establishing minimum wage, overtime pay, and other employment standards that must be considered in arbitration policies

National Labor Relations Act (NLRA): Federal law protecting workers' rights to organize and engage in collective bargaining, affecting how arbitration agreements can be structured

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

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

Circuit City Stores v. Adams (2001): Supreme Court case establishing that the FAA applies to most employment contracts, excluding only transportation workers

Gilmer v. Interstate/Johnson Lane Corp. (1991): Supreme Court decision confirming that statutory employment claims can be subject to mandatory arbitration agreements

Mutual Agreement Requirements: Legal requirement that arbitration agreements must be mutual and supported by valid consideration to be enforceable

Procedural Fairness Standards: Requirements for fair arbitration procedures including neutral arbitrator selection, reasonable discovery rights, and cost allocation

Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act: 2021 federal law prohibiting mandatory arbitration of sexual assault and sexual harassment claims

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

Notice Requirements: Legal requirement that employees must receive clear notice and understanding of arbitration agreement terms

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Mandatory Arbitration Agreements In Employment

U.S.-governed employment agreement establishing mandatory arbitration as the primary dispute resolution method, compliant with federal and state requirements.

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What is a Employment Arbitration Policy?

What sections should be included in a Employment Arbitration Policy?

What sections are optional to include in a Employment Arbitration Policy?

What schedules should be included in a Employment Arbitration Policy?

Authors

Alex Denne

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