Arbitration is a private process in which two or more parties agree to have a neutral third-party make a decision about their dispute. This process is different from mediation, as the arbitrator has the authority to make a binding decision. It is an out-of-court method for resolving disputes between employers and employees. The Federal Arbitration Act (FAA) allows employers and employees to enter into an arbitration agreement, which outlines the steps that must be taken before arbitration can be initiated.
The reasons for challenging or appealing an award depend on factors such as the terms of the arbitration agreement, the venue of the arbitration, and institutional rules. If the parties cannot agree on an arbitrator, a court can appoint one or suggest an external provider. The arbitrator must inform the parties if there are any reasons to believe that they will act in a partial manner. Generally, an arbitrator will only be considered impartial if they have or have had a relationship with one of the parties. Once the arbitrator is selected, they will work with both parties to set a date to hear their case.
It is important to note that there are some situations where an arbitration clause will not apply or where a court will not enforce it.