Most employers include some type of arbitration clause in employee handbooks. The purpose of an arbitration clause is to prevent employees from filing a lawsuit against their employer in certain situations. For example, an employee who signs an arbitration clause might give up the right to file a claim against an employer that fires him or her. Arbitration clauses can protect your company from liability in many different scenarios.
Houston workers compensation non-subscriber attorney Brian White can help employers in Houston draft strong arbitration clauses to include in employee handbooks. We have years of experience handling employment claims from both sides of the courtroom. Our lawyers know exactly what to include in arbitration clauses, as well as how to represent employers involved in arbitration after an employee signs such a clause.
If an employee has filed a claim against you, let us represent your company. We regularly obtain exceptional settlements and verdicts on our clients’ behalf.
Do You Need an Arbitration Clause?
If you’re interested in creating a new employee handbook with an arbitration clause, your goal is probably to protect the company from a court case in the event of any employment disputes. Your arbitration clause will give employees the option to discuss the issue during arbitration instead – a lawsuit alternative that does not involve a court or jury. Arbitration only involves an unbiased third-party arbitrator (an attorney, judge, etc.), the claimant, the defendant, and their attorneys, if applicable.
An arbitration clause can benefit employers in a few different ways. For one, it may make the legal process fairer for employers, since juries often sympathize with employees more than arbitrators. Arbitration also requires less evidence on the employer’s part than a full-blown jury trial, in most cases.
They are less formal and therefore less costly for everyone involved. Arbitration is also faster than court trials. Finally, employees generally cannot appeal the arbitration decisions. The conclusion of arbitration usually means the end of the matter.
Once an employee signs an arbitration clause, the contract is binding for both parties. You cannot alter the terms of the arbitration clause and your employee can’t “opt out.” If alleged discrimination, harassment, wrongful termination, or another employee complaint occurs, the matter will go to arbitration according to the terms of the clause.
The employee will not have the option to take you to court. Even if the employee didn’t take the time to read the handbook and understand what he/she signed, the clause is legally binding in Texas.
FAQs About Employee Handbook Arbitration Clauses
If you aren’t sure if you need an arbitration clause in your employee handbook, request a free consultation with Attorney Brian White to discuss your specific establishment in more detail. In the meantime, the following FAQs may help with your decision:
What if the employee refuses to sign?
If an employee refuses to sign until you null the arbitration clause, it is up to you if you want to take the risk of removing the clause to hire the person.
Can I fire someone who won’t sign an arbitration clause?
Yes, it is your prerogative to rescind the offer of employment as well as fire an at-will employee for refusing to sign.
Who pays the costs of arbitration?
Since the arbitration clause is yours, you (the employer) will pay the costs should arbitration occur.
Hire a Houston Arbitration Clause Lawyer
Arbitration clauses are generally for the best interests of the employer, not the employee. Adding a fair arbitration clause as an employer to your employee handbook can save you significant time and money in the future. If you don’t want to deal with an employment claim that goes to trial down the road, consider enacting an arbitration clause. Contact us for assistance with arbitration clauses in Houston.