Understanding the Basics of Arbitration - Barrett & Farahany

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Understanding the Basics of Arbitration

Understanding the Basics of Arbitration

basics of arbitration

Arbitration is an alternative dispute resolution in the United States. From a certain point of view, it can offer a quick way to settle a dispute without going through costly and time-consuming court proceedings. From another point of view, it may be seen as a secretive and manipulative way for one party to keep the information confidential from the court of law, the public, and more. It is important for everyone, especially those considering or being forced into arbitration, to understand how it works and when it can be used.

If you’re uninformed about what it entails, the employment law attorneys at Barrett & Farahany share what you need to know.

Arbitration 101: How Does it Work?

Arbitration is an alternative legal dispute process where parties present their case to a neutral third-party arbitrator. The arbitrator will make a decision based on all available evidence as to how all parties should conduct themselves. The arbitrator’s decision is legally binding and can be enforced in court if necessary should only one side agree with the outcome.

The Issues

The issues that many people have with this process stem from two factors:

  • How people are forced to use this process by employers
  • How a third party can be secretly biased toward or against one of the parties

It’s not unheard of for an arbitrator to appear biased against an employee in issues between employees and employers. This can lead to employees being treated unfairly by the dispute process and employers getting away with whatever they were rightfully accused of.

The Stated Benefits

In contrast to a court trial, which can take years, arbitration takes significantly less time. Since it takes less time, lawyer fees are often less as well.

Also, they are private. Depending on the circumstances of one’s case, one or both parties may not want the information to become public. While there’s no guarantee that a courtroom trial will be noticed by the public, it will be on the public record and open to public view.

Arbitration 101: When Should You Consider Arbitration?

Plaintiffs – the parties filling the lawsuit – may realistically want arbitration when they are seeking a speedy resolution to their case. This can be to avoid paying the significant cost of going through a full trial, which doesn’t guarantee a larger settlement.

For defendants, it can offer more flexibility than a trial and allow them to present arguments that would otherwise be barred in court proceedings. Also, as the accused, trials tend to threaten their reputation more than plaintiffs, but plaintiffs are not immune to public scrutiny.

Arbitration 101: What Kinds of Cases Use Arbitration?

Arbitration can be used in nearly any type of civil court case if both parties agree to it. This includes everything from personal injury to employment discrimination. However, cases surrounding criminal charges cannot use arbitration.

What is Forced Arbitration?

Employers often include clauses in employment contracts where employees sign away their right to a public trial if they want to file a legal dispute against the employer. This means employees sometimes have no choice but to enter private arbitration, often where they are at a legal disadvantage.

However, due to a bill signed into law by President Joe Biden at the end of 2022, forced arbitration is illegal nationwide for cases involving sexual harassment of an employee. This means that employers cannot force employees to sign contracts stating that they must use arbitration to settle disputes and accusations of sexual harassment. Some states have laws that prohibit forced arbitration for legal disputes involving discrimination as well.

What Should You Do If Your Employer Wants to Use Arbitration?

When deciding whether arbitration is the best way forward with a legal dispute against your employer, it is important to understand the process involved with this method. It’s also essential to consider the nature of the dispute and what you want from the outcome. If you’re unsure how to come to a decision, consult an attorney. The employment law attorneys at Barrett & Farahany have extensive experience helping people overcome abusive employers, in court and through arbitration.

With an accurate understanding of your options, you can decide what’s best for you to resolve your dispute. If you need help, contact Barrett & Farahany to speak with an attorney today.


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Barrett & Farahany

Georgia Office

3344 Peachtree Road NE, Suite 800
Atlanta, GA 30326

Alabama Office

2 20th St N, Suite 900,
Birmingham, AL 35203

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77 W. Wacker Dr. Suite 4500
Chicago, IL 60601


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