An “Employee Arbitration Policy” is a key component of your hiring policies and practices. Arbitration reduces legal costs tremendously. Here is an actual sample / example Employee Arbitration Policy & Agreement template from Employee Manual Builder workplace policies software.
- Have the employee read and sign the agreement as part of their acceptance of your offer of employment.
- We keep a copy of the agreement here in the Employee Policies Manual as a reminder as well as for future reference.
- There has been a question raised about the legality of this policy here is our response:
- Usually, an employer can rescind an employment offer if a prospective employee refuses to sign the arbitration agreement. And an employer can fire an at-will employee who refuses to sign one. Therefore, declining to sign the agreement could jeopardize or put at risk “sealing the deal on accepting a job”.
- Some employers will negotiate this point, however, especially if they are more excited about the candidate than they are about arbitration. If you have a highly sought after prospect, or if you have a highly valued employee in your company, as the employer you may allow refusal to sign rather than give up the employee
- Negotiating your agreement to arbitrate is no different from discussing your salary or benefits. The employer is negotiating for its best interest, as is the employee. For example, they may be interested in helping select an arbitrator rather than having one picked by the employer and they may want to know what the arbitrators personal and business background is as to avoid potential bias.
- The forms that are presented to employees during an employee orientation should be given in such a manner that they are not buried in other forms and the employee is given sufficient time to read and sign the agreement.
Sample / example Employee Arbitration Policy & Agreement template
If an employment dispute arises while you are employed at [Company], you agree to submit any such dispute arising out of your employment or the termination of your employment (including, but not limited to, claims of unlawful termination based on race, gender, age national origin, disability, breach of contract or any other bias prohibited by law) exclusively to binding arbitration under the federal Arbitration Act, 9 U.S.C., Section 1. Similarly, any disputes arising during your employment involving claims of unlawful discrimination or harassment under federal or state statutes shall be submitted exclusively to binding arbitration under the above provisions. This arbitration shall be the exclusive means of resolving any dispute arising out of your employment or termination from employment by [Company] or you, and no other action can be brought by employees in any court or any forum.
By simply accepting or continuing employment with [Company], you automatically agree that arbitration is the exclusive remedy for all disputes arising out of or related to your employment with [Company] and you agree to waive all rights to a civil court action regarding your employment and the termination of your employment with [Company]; only the arbitrator, and not a judge nor a jury, will decide the dispute.
If you choose to dispute your termination or any other alleged incident during your employment, including but not limited to unlawful discrimination or harassment, you must deliver a written request for arbitration to [Company] within one (1) year from the date of termination, or one (1) year from the date on which the alleged incident(s) or conduct occurred, and respond within fourteen (14) calendar days to each communication regarding the selection of an arbitrator and the scheduling of a hearing. If [Company] does not receive a written request for arbitration from you within one (1) year, or if you do not respond to any communication from [Company] about the arbitration proceedings within fourteen (14) calendar days, you will have waived any right to raise any claims arising out of the termination of your employment with [Company], or involving claims of unlawful discrimination or harassment, in arbitration and in any court or other forum.
You and [Company] shall each bear respective costs for legal representation at any such arbitration. The cost of the arbitrator and court reporter, if any, shall be shared equally by both parties, or as determined by the arbitrator.
Acknowledgment of and Agreement with [Company] Arbitration Policy
This policy is included in the actual Arbitration Agreement you signed upon your acceptance of employment with [Company].
Understood, Agreed & Accepted
My signature on this document acknowledges that I understand the above Arbitration Policy and agree to abide by its conditions. I also acknowledge that I understand my employment is at-will and may be terminated at any time, with or without reason, by either [Company] or myself. I further agree that, in accordance with [Company]’s Arbitration Policy, that I will submit any dispute — including but not limited to my termination — arising under or involving my employment with [Company] to binding arbitration within one (1) year from the date the dispute first arose. I agree that arbitration shall be the exclusive forum for resolving all disputes arising out of or involving my employment with [Company] or the termination of that employment. I agree that I will be entitled to legal representation, at my own cost, during arbitration. I further understand that I will be responsible for half of the cost of the arbitrator and any incidental costs of arbitration.
- This sample / example “Employment At-Will” policy template was excerpted from Employee Manual Builder workplace policies handbook software