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Comment arbitration agreement

hey everyone's Paul Simon with the law firm Oh Simon Pascal we're here with another video tip of the week and today's tip we're going to talk about arbitration agreements and specifically arbitration agreements in the employment context so let's kind of go through some pros cons and then our alternative suggestion for employers who like the arbitration but may want to after watching this video modify it slightly so let's go through some of those probes one of the pros of an arbitration agreement is you can significantly limit discovery and the way you do that is in your arbitration agreement you spell out what the rules are whether or not you're only going to allow a certain amount of depositions if you're going to allow interrogatories at all and then whether or not the document production will be limited in any sort of sense generally in federal and state law you have a certain amount of preset depositions interrogatories etc and you can limit those in the arbitration agreement now the one caveat there is the other side can argue that it's not reasonable and so the arbiter can take a look and say yes that's not reasonable in this case forever and so we're going to expand the amount of discovery allowed another pro would be it can be more private I think that's one of the big reasons why employers go with an arbitration agreement and the reason for that is it's a private filing versus a general lawsuit which is filed in a public court and can be accessed by anyone in an arbitration it's a private matter so generally no one else is aware that the arbitration is happening or more importantly what the results of the arbitration is another Pro is that it can also potentially limit kind of what's known as your runaway jury oftentimes an arbiter is a private lawyer who isn't going to get emotional about the facts and therefore you never have these massive runaway juries where once I believes that the jury just got it wrong so that's a pro of an arbitration agreement and the last one is that can be more efficient generally with an arbitration you're able to get on the calendar of the arbiter much sooner versus a state or federal court where it can take a year to go to trial so it can be much fish it which can also make it less costly so let's talk about those cons some of it we talked about it being private as a pro it actually may not be as private as you want what often happens is the employee will file their lawsuit in state or federal court and then you as the employer has to notify the court hey we have an arbitration agreement please take this out of your court and the court will do that but the problem is that Umbridge no filing which may have all these allegations and you know assertions against you is a public record and will not be removed so now you've lost that privateness the other one is I think arbitration agreements they've actually gotten much more costly than going through traditional state or federal court and the reason for that is arbiters are private lawyers like I said oftentimes retired judges who require just an extremely high amount of hourly pay and generally those arbiters require an upfront so you may be looking at a ten to twenty thousand dollar shake check you have to cut before you even actually get to the merits of the matter so that's something that I think you got to really keep in mind especially as a small employer the last one is arbiters generally are known to split the baby and what that means is because they're private because they're trying to get your business they don't want one side to go away to unhappy so oftentimes you'll get these verdicts that you know give the plan of some money if not as much as they would have gotten if they had gotten to court but they also won't listen em out so that's something to keep in mind so what's an alternative if you want some of those pros in the arbitration but you worry a little bit about the cons what are the alternatives is in your employment agreement to do a jury waiver what that's going to be as you specifically spell out that both parties are waiving the right to a fury generally this needs to be bold print so it's very obvious we recommend that you have the employee initial right near that jury waiver paragraph so that there can be no sort of I wasn't aware that I was waiving my right to a jury now what that's going to do is that's going to get you back to that pro of we're going to limit a runaway jury because again a judge is Joey going to be as emotional and so they're going to rule just on the facts and give a much more reasonable verdict to the extent that the plaintiff does prevail and also when you go to a court you can ask the court to answer protective orders and this is going to give it that some of that privacy you can you know require confidentiality of all the documents of depositions etc and you can you know really limit what the public is going to be exposed to in terms of what they're aware of the other last tip that we often recommend our employers do is to add a mandatory mediation agreement and their employment agreement and what this will do is this is going to make stuff more efficient because hopefully you can get your dispute resolved prior to going to arbitration or going having the employee file lawsuit which you know again it's going to then be much more costly so you won't be blindsided by just a lawsuit coming out of the woodwork this is going to require the employee notify you hey I've got this dispute I'm doing the mandatory mediation and you two can go and hopefully get best resolved so that's our tip for the week tune in next week