Arbitration Clauses in Employment Agreements: Keeping Them Enforceable By: Malissa Wilson Mandatory arbitration clauses in employment contracts reduce the possibility that legal action will be taken against employers. Wrongful termination, wage and discrimination claims can all be resolved in a private process before a disinterested third person, rather than publicly in court before twelve jurors. While enforceable, arbitration clauses in employment agreements must still comply with basic principles of contract formation. For instance, an employee can still raise misrepresentation, mistake, and undue influence as defenses to the enforcement of an employment agreement containing an arbitration clause. In drafting arbitration clauses, it is important that the language is written in a way that is not confusing (use of terms that are vague or not commonly understood) or hard to read (font size is too small). It is also important that the clause is fair by not placing more of the cost to arbitrate on the employee or placing unreasonable limitations on damages or the proceedings themselves. The arbitration clause should name the arbitration organization, such as the American Arbitration Association, where the claim will be filed and whose rules will be followed. When presenting an arbitration clause to potential and current employees, human resource personnel should go over the clause with the employee; answer any questions an employee may have; and, not rush or pressure the employee into signing the agreement. Last, the agreement must be signed indicating an understanding that the employee is waiving the right to pursue employment-related claims […]