Arbitration Agreements in Employment Contracts are increasingly common in U.S. workplace relationships as employers seek to manage litigation risks and costs. These agreements establish a framework for resolving employment-related disputes through arbitration rather than traditional court proceedings. They must be carefully drafted to ensure compliance with federal laws (including the Federal Arbitration Act), state-specific requirements, and recent legislative developments such as the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act. The agreement typically covers dispute resolution procedures, cost allocation, and the scope of claims subject to arbitration.
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1. Parties: Identification of employer and employee entering into the arbitration agreement
2. Background/Purpose: Context of the agreement and its integration with employment relationship
3. Definitions: Key terms used throughout the agreement including 'Arbitration', 'Claims', 'Dispute'
4. Scope of Agreement: Specific claims covered and excluded from arbitration
5. Arbitration Procedures: Process for initiating and conducting arbitration, including arbitrator selection
6. Costs and Fees: Allocation of arbitration costs between parties
7. Governing Law: Applicable law governing the agreement
8. Acknowledgment and Signatures: Formal acceptance of terms by both parties
1. Class Action Waiver: Optional provision to waive right to participate in class actions, subject to state law restrictions
2. Confidentiality Provisions: Optional requirements for maintaining confidentiality of arbitration proceedings when privacy is important
3. Discovery Procedures: Optional specific rules for information exchange during arbitration when parties want defined discovery limitations
4. Severability Clause: Optional provision ensuring partial invalidity doesn't void entire agreement when agreement contains multiple independent provisions
1. Schedule A - Arbitration Rules: Detailed procedures and rules governing the arbitration process
2. Schedule B - Claims Covered: Comprehensive list of claims subject to arbitration
3. Schedule C - Claims Excluded: List of claims specifically excluded from arbitration
4. Appendix 1 - Fee Schedule: Detailed breakdown of arbitration costs and fee allocation
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