Arbitration is a means of resolving a dispute which is quite common in collective bargaining agreements, and which is becoming common in nonunion employment situations.
Employees who have a dispute with an employer could be compelled to participate in the arbitration process.
In arbitration, the parties agree to submit their dispute to an independent third party (“arbitrator”) who normally holds a hearing and also reviews written arguments before submitting an “award.” That decision is normally binding on the parties.
Although the process has been used for many years in collective bargaining agreements, employers may also use arbitration in non-union environments as a way of reducing the cost of litigation, speeding up the process, and avoid going through the court system. Employers should consult an attorney when drafting an arbitration agreement. Such agreements do not preclude the Equal Opportunity Employment Commission from pursuing claims on its own initiative.