Question

Why do many employers who are not unionized require their employees to sign pre-employment arbitration clauses?

Answer 1

Pre-employment Arbitration Clause

Current employment litigations impacting the employment environment where both the employer and employee are facing the problems. Employees are fighting for their rights and employers are doing their monopoly. Employees are dragging the employers to the court of law where the employers are losing a lot. So employers are always interested to sign the arbitration clause before the employment for taking away the rights of employees to sue the employers. Arbitrators are the neutral third party may be the retired judges or attorneys hired to hear both the sides of case to make decisions.

Why employer sign the clause

1. The case solved by arbitrator is cost effective and less time consuming where court actions are very costly and time consuming. So employers find easy to hire the arbitrator instead of hiring one lawyer in court.
2. Employers have believe that they fare better in arbitration because juries of court are more likely to be emotional to give the decision in favor of employees where the employer may lose huge money as compensation or settlement. But arbitrators are more likely to side with business and more likely set their emotions aside and look only at the facts.
3. Case in the courts will reveal the privacy of employer and will defame the reputation where as in case of arbitration they value the privacy and decisions not made publicly.
4. Employers believe that they stand to lose less often and less money in arbitration than they would in court.
5. Employees cannot raise their voice to increase the wage, leave rules and working conditions once they have signed the arbitration clause in return providing sense of security to employers.
6. Employers are always interested to minimize the risk related to employment with lesser amount of stress and quick manner which arbitration provides.