Arbitration is a private process in which the disputing parties agree that one or more people can make a decision about the dispute after receiving evidence and hearing arguments. It is different from mediation because the neutral arbitrator has the authority to make a decision about the dispute. Recently, an increasing number of workers have been asked to sign “arbitration agreements” to get or keep their jobs. These agreements aren't always easy to understand, but they can have a big effect on workers and on any possible lawsuits they may have against their employers. Before arbitration, the employer and employee (together known as the “parties”) select an arbitrator to hear their dispute.
Once the arbitrator is selected, the parties will work with the arbitrator to set a date to “hear” their case. Arbitrators are qualified professionals who act as neutral decision makers during arbitration. They can be former judges, current or former lawyers, people who are not lawyers and may specialize in certain areas, such as employment law. Generally, the worker and the employer mutually choose the arbitrator. However, if the worker and the employer cannot agree, a court can appoint an arbitrator or suggest an external provider (an organization or service that maintains a list of approved arbitrators).
Arbitration is different from “mediation” and “complaint” procedures. There are some situations where an arbitration clause will not apply to your claim or where a court will not enforce the arbitration clause. Below is a list of some of those situations. However, a worker may realize that arbitration has advantages. Some of the specific advantages and disadvantages of arbitration are listed below.
An arbitrator's decision is generally considered final and “binding” - both parties are expected to follow the arbitrator's decision; otherwise, they may be taken to court. However, arbitral decisions may occasionally be appealed. This means that either party can file a complaint in a state court asking the court to “overturn” the arbitrator's decision, making it invalid. If your employer hasn't followed the arbitrator's decision, you can ask a state court to “enforce” the judgment, which means you can ask the court to confirm the award and force the employer to pay. Arbitration begins when the parties submit their dispute to the arbitrators.
Filing is simply the act of contacting the arbitrators and providing them with information about the dispute and setting a deadline for commencing arbitration proceedings. Submitting a dispute to arbitration authorizes the arbitrators to make a decision that binds the parties and resolves their dispute. In mandatory arbitrations, many jurisdictions require the parties to submit the matter to arbitration within 6 months after the dispute arises. However, arbitrators may be required to explain their reasoning if required by law or by their arbitration agreement. An overview of arbitration and how it differs from litigation and other forms of alternative dispute resolution (ADR), including an introduction to when it makes sense to arbitrate a dispute.
Arbitrations usually arise from contractual clauses that require parties to arbitrate their disputes rather than sue. The Federal Arbitration Act (FAA) is the law that allows an employer and a worker to agree, by contract, to arbitration instead of litigation. Despite its wide range of possible forms, there are some characteristics that are common to almost all arbitrations. The process generally begins when one party notifies another of its intention to arbitrate a dispute. Professional arbitrators sometimes develop their own rules and procedures, although these can vary greatly depending on the service. The pros and cons of arbitration as an alternative to filing a lawsuit should be considered carefully before making any decisions.
This includes data on potential cost savings as well as relative simplicity of procedure compared with litigation in court. By law, an arbitrator must inform both parties if there are reasons to believe that they will be biased. For anyone faced with potential arbitration proceedings, it's important to know how it works and what you can expect during each step of the process. Arbitration agreements may include clauses that control selection of arbitrators, format of hearings held, procedural and evidentiary rules used, applicable law, and place where arbitration will take place.
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