An agreement between an employer and an employee, sometimes signed prior
to employment and in some instances after employment has begun, in which both
parties agree to submit any employment-related disputes to arbitration, rather
than to the traditional court process. Such agreements benefit both employers
and employees because they tend to produce more rapid resolution of claims.
They are especially advantageous for employers because arbitration avoids the
occasional high-dollar, "runaway jury" verdict. On the other hand, arbitrators
have a tendency to "split the baby" so that even when an employee's claim is
of questionable merit, an employee will often receive an award. Although there
is conflicting caselaw in various jurisdictions regarding the enforceability
of preemployment arbitration agreements, the weight of authority appears to
hold that such agreements—if equitably drafted—are in fact, enforceable.
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