The Mutual Agreement To Arbitrate Claims As A Condition Of Employment has become increasingly common in U.S. employment relationships as organizations seek to manage litigation risks and costs. This document is typically presented during the hiring process and serves as a prerequisite for employment. It outlines the scope of claims subject to arbitration, procedures for selecting arbitrators, cost allocation, and preservation of statutory rights. The agreement must comply with federal legislation, including the Federal Arbitration Act, as well as state-specific requirements. While arbitration agreements can help streamline dispute resolution and reduce costs, they must be carefully drafted to ensure enforceability and fairness under both federal and state laws. The document is particularly relevant in contexts where employers seek to establish clear dispute resolution procedures while maintaining compliance with employment laws and regulations.
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1. Parties: Identification of employer and employee, including full legal names and addresses
2. Background/Recitals: Context of employment relationship and mutual intent to arbitrate disputes
3. Definitions: Key terms used in agreement and scope of covered claims
4. Scope of Agreement: Types of claims covered and excluded from the arbitration agreement
5. Arbitration Procedures: Selection of arbitrator, governing rules, and time limits for arbitration proceedings
6. Costs and Fees: Allocation of arbitration costs, filing fees, and attorney fees
7. Acknowledgment: Voluntary agreement and confirmation of right to consult counsel
8. Governing Law: Applicable state/federal laws and choice of law provisions
1. Class Action Waiver: Optional provision to prevent class actions, typically included when employer wants to prevent collective proceedings
2. Confidentiality Provisions: Optional terms governing confidentiality of arbitration proceedings and outcomes
3. Discovery Procedures: Optional detailed discovery rules and limitations, particularly useful for complex employment relationships
4. Severability Clause: Optional clause ensuring survival of agreement if parts are found invalid, recommended when agreement contains multiple provisions
1. Schedule A: Arbitration Rules: Detailed procedures for conducting arbitration
2. Schedule B: Fee Schedule: Breakdown of costs and fees associated with the arbitration process
3. Schedule C: Excluded Claims: List of specific claims not subject to arbitration
4. Schedule D: Forms: Standard forms for initiating arbitration proceedings
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