Employers: Avoid litigation with arbitration clauses

On Behalf of | Apr 6, 2017 | Employment Law

Running a business is an incredibly complex responsibility. Employers have to balance the priorities of the company, the rights of the workers and their financial resources on a regular basis, and sometimes, disagreements arise. This not surprising, considering all the different perspectives and interests involved in any business relationship.

While these disputes may be unavoidable, you can take control of how they are resolved. For instance, many business owners in Cincinnati opt to include arbitration clauses in their contracts.

These clauses dictate that any dispute arising between two parties will be resolved through arbitration as opposed to litigation. Employers include these clauses for a number of reasons.

  1. Arbitration can minimize the resources spent on resolving disputes. It can be less expensive and more efficient than litigation, which means less time in court and less money tied up in legal fees.
  2. Arbitration is private, which keeps sensitive and potentially damaging information about a company out of the public record.
  3. The process is less formal than litigation, which can make people (including witnesses) more comfortable and less intimidated.
  4. Parties can select the arbitrator, as opposed to having a random judge assigned to a court case. This can increase the likelihood that the decision-maker is already familiar with various elements of the case.
  5. Arbitration clauses establish clear direction on dispute resolution methods, which can eliminate any confusion or erroneous expectations.

It is crucial to note here that arbitration is not right for every situation, and including these clauses in every contract without consideration would be unwise. Every contract — whether it is between a company and employees, a landlord or other companies — should be drafted and reviewed thoughtfully, carefully and with legal guidance.

In order to determine whether arbitration clauses are in your best interests and the best interests of your company, you would be wise to discuss the options with your attorney.