Our June 11th blog post broadly discussed arbitration and the upward trend of including mandatory arbitration clauses in agreements. This week, we analyze the pros and cons of arbitration to elucidate when arbitration clauses are useful and when they are potentially harmful. In arbitration, individuals and entities bring legal claims against one another outside the public court system. Although many aspects of arbitration are similar to a civil court trial, arbitration has a number of key differences. Pros Speed – Arbitration is generally faster than litigation. Whereas litigation often takes years, the arbitration process may only take a few months. However, arbitration can take longer when there are…
-
-
Fourth Circuit: Arbitration Agreement in Employee Handbook Not Binding
A recent decision by the United States Court of Appeals for the Fourth Circuit ruled that a North Carolina employee suing under federal and North Carolina law for wage and hour violations was not required to participate in arbitration despite an arbitration clause in her employee handbook.[1] The Fourth Circuit acknowledged that North Carolina law would ordinarily bind the employee via implied consent to the clause, but she signed an acknowledgement form upon receipt of the handbook that expressly stated the handbook provisions did not constitute a binding contract. Rose Lorenzo, an employee of Prime Communications, LP, managed a…
