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.
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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
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
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
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