Forced Arbitration Agreements at Work: Can You Still Sue?

What an Arbitration Agreement Is

Arbitration is a private process in which a neutral decision maker, called an arbitrator, hears both sides and issues a decision. There is usually no jury and no public record, and the rules for exchanging evidence are more limited than in court. Courts generally enforce these agreements under the Federal Arbitration Act, which is why employers include them. The EEOC has long expressed concern about employers requiring workers to give up court access as a condition of getting or keeping a job, as described in its policy statement on mandatory binding arbitration, but the agreements remain common.

What the Agreement Usually Covers

• Which claims

  Many clauses cover wage claims, discrimination, retaliation and wrongful termination. The exact wording controls, so read the list of covered claims.

• Who decides

  The clause names an arbitration provider or sets rules for choosing the arbitrator.

• Who pays

  Some agreements split fees, and some place the cost on the employer. High fees can be a reason to challenge a clause.

• Class and group claims

  Many clauses require each worker to bring a claim alone and give up group lawsuits.

• Deadlines

  The agreement may set a shorter filing time than the law would, which makes early action important.

The 2022 Law on Harassment and Assault Claims

Congress changed the rule for one important category. Under the federal law on arbitration of sexual assault and sexual harassment disputes, a worker who has a sexual harassment or sexual assault dispute can choose to bring it in court even if an earlier agreement required arbitration. The choice belongs to the worker, not the employer. Disputes can also raise a question of whether the case is covered, so keep the dates and the facts that show the claim involves sexual harassment or assault.

You Can Still Go to the EEOC

An arbitration agreement is a contract between you and your employer. The EEOC is not a party to it, so signing does not stop you from filing a charge of discrimination, and the agency can investigate and act on its own. Charge deadlines still apply, so do not wait for an arbitration process to start. Our guide to the EEOC complaint process explains the steps, and the filing deadlines guide explains how short the windows can be.

Reasons an Agreement May Not Hold Up

• No real agreement

  If you never saw or accepted the document, or the employer cannot show you agreed, enforcement can be contested.

• Unfair terms

  Courts have refused to enforce clauses with one-sided rules, unreasonable costs or terms that strip away legal remedies.

• Claim not covered

  The clause may not reach the type of claim you have, or it may exclude certain claims in its own text.

• Unclear wording

  Vague or conflicting language, such as a handbook that says it is not a contract, can weaken an employer argument.

Steps to Take If You Have Signed One

• Find your copy

  Check your onboarding emails, the employee portal and any handbook acknowledgment, and save a copy.

• Look for an opt-out

  Some agreements let you opt out within a set number of days. If you are still inside that window, follow the instructions in writing.

• Write down the facts

  Record dates, names, messages and witnesses now. The evidence matters in court and in arbitration. Our <a href="/blogs/workplace-harassment-evidence-employees-should-save" class="text-primary underline">guide to harassment evidence</a> lists what to keep.

• Watch the deadlines

  Calendar the EEOC charge deadline and any shorter deadline in the agreement.

• Get the clause reviewed

  Whether it is enforceable depends on the wording, the state and the claim, so have it reviewed before you answer a demand to arbitrate.

Before You Sign a New One

If you are handed an arbitration agreement with a job offer, you can ask questions, request time to read it and ask whether it can be changed. Employers sometimes agree to carve out certain claims or to pay the arbitration fees. A job offer may be tied to signing, so weigh that, but do not sign something you have not read. The same care applies to a severance agreement, which can also contain a waiver of your right to sue.

Frequently Asked Questions