In these agreements, the employer and employee agree to resolve any employment-related dispute through a binding arbitration as opposed to a jury trial.
The arbitrator will explain the process. Each side may present an uninterrupted opening statement setting forth its position as to the facts and the law. After opening statements, the parties present their evidence and witnesses. The arbitrator swears in the witnesses and makes rulings on the admissibility of evidence.
Arbitration agreements have become a common feature in employment contracts across the United States, including California. These agreements require employees to waive their right to sue their employers in court and instead resolve disputes through arbitration.
Under California law, an employer can require its employees to agree to arbitration as a term of employment.
As of February 15, 2023, California employers can require employees to agree to arbitrate most employment disputes as a condition of employment after the Ninth Circuit Court of Appeals, in Chamber of Commerce of the U.S., et al.
The court said the state law is preempted by the Federal Arbitration Act (FAA). As a result, Assembly Bill 51 no longer stands as an obstacle to employers that wish to require arbitration agreements as a condition of employment in California, so long as the FAA applies and governs the agreement.
The new law provides that when a party appeals an order denying a motion to compel arbitration — an order that is immediately appealable — the trial court is not obligated to stay the action during the pendency of the appeal. The law marks a major shift in California civil procedure law.
Arbitration agreements are subject to certain rules in order to have enforceability under California and federal law. If an arbitration agreement fails to meet these requirements, it can be held unenforceable.
The first example is a wrongful termination claim. Wrongful terminations are claims against an employer where a former employee feels that they were not fired or terminated correctly for one reason or another.
An arbitration clause is typically found in an employment agreement, application, or employee handbook. An arbitration clause requires workers to go to arbitration, rather than file a lawsuit, for some or all kinds of employment-related claims. 1 See below some examples of arbitration clauses.