Under California law, an employer can require its employees to agree to arbitration as a term of employment. However, if the agreement has too many unfair or biased conditions, courts may refuse to enforce the arbitration agreement or chop off the unfair terms.
Arbitration is a contract-based form of binding dispute resolution. In other words, a party's right to refer a dispute to arbitration depends on the existence of an agreement (the “arbitration agreement”) between them and the other parties to the dispute that the dispute may be referred to arbitration.
In some instances, you may be able to sue if you signed a valid arbitration agreement. While courts generally favor arbitration agreements, they will allow you to file a lawsuit if either you didn't understand your rights or your claims fall outside the arbitration provision's scope.
What is an arbitration agreement? It's typically a clause in a broader contract in which you agree to settle out of court, through arbitration cases, any dispute that arises with your counterpart.
An employment arbitration agreement typically asks employees to agree that any disputes will be resolved through arbitration. It can be a standalone document, but it's most often part of a broader employment contract.
Arbitration agreements require that persons who signed them resolve any disputes by binding arbitration, rather than in court before a judge and/or jury. What is binding arbitration? Binding arbitration involves the submission of a dispute to a neutral party who hears the case and makes a decision.
A claimant will typically start arbitration by sending a document known as a “request for arbitration” or a “notice to arbitrate” to its opponent.
There are some benefits to arbitration if something goes wrong for you alone because it can be easier and faster to navigate than going to court. That being said, if you would prefer to have access to class action lawsuits, then opting out might be the better option for you.