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Arbitration is a process by which parties to a dispute submit their differences to the judgment of an impartial person or group appointed by mutual consent or through statutory provision. Many employers now require an employee to sign a mandatory arbitration agreement. It may limit the employee’s right to file charges against the employer in courts and other related law bodies. The decision of an arbitrator is usually final, subject only to confirmation by a court, and reversal is limited to very narrow grounds.

Under arbitration, the plea is heard by the third party, often a retired judge. Unlike the court, a jury is not called in. A jury is said to be more sympathetic to the cause of an employee than an arbitrator would be, and the arbitration process is generally more of an advantage to an employer than to an employee. Unlike court trials, where an employee might get a second chance to appeal, the arbitrator’s decision is final and cannot be challenged.

Often, the arbitration agreement requires the loser to pay for the cost of the arbitration process, which can run into tens of thousands of dollars. An employee has less access to company records than in litigation, making it harder to discover evidence against an employer, since the personnel files, records and documents are with the employer.

Before accepting its terms and conditions and signing an arbitration agreement, the employee should read every document carefully and thoroughly. Rather than showing ignorance about certain company policies later, it is better to clear any doubts in the beginning.

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