Arbitration is an alternative method of resolving legal disputes in which two parties present their individual versions of a complaint to an arbitrator or panel of arbitrators. It can be voluntary or mandatory, and is often used when the parties involved are unable to reach an agreement on their own. In some cases, one party can force the other to go to arbitration, even if a jury trial would be more advantageous for the other party. The arbitrator decides the rules, evaluates the facts and arguments of both parties, and then makes a decision on the dispute.
Companies often prefer arbitration because they have an advantage in this process and can evade liability. However, you always have the right to arbitrate, and you never want to give up the right to sue if arbitration doesn't work. When presented with an arbitration agreement that is excessive in several respects, courts can invalidate the entire agreement or separate the excessive elements and enforce the rest. As courts increasingly define the limits of arbitrators' authority in individual cases, they are providing control while still granting due deference to arbitral decisions that fairly interpret and extract their essence from the parties' contracts.
The Federal Arbitration Act (FAA) is the law that allows employers and workers to agree, by contract, to arbitration instead of litigation. You can hire your own lawyer to represent you during arbitration if the issue is important or if a significant amount of money is involved. Arbitration hearings can be conveniently scheduled depending on the availability of the parties and the arbitrator. The Supreme Court enforced an arbitration clause despite recognizing that it would likely prevent someone from pursuing their case due to cost.
The Massachusetts District Court refused to set aside an arbitration award after finding that, despite the plaintiff's argument to the contrary, the arbitrator did not ignore the parties' clear terms of the contract. Courts are also divided on whether a court or arbitrator should decide whether or not collective arbitration is allowed.
