HR Management & Compliance

Employer Survey: Arbitration Agreement Use Growing; Employees Rarely Object

Mandatory agreements to arbitrate employment disputes are one of the most controversial workplace topics. Court decisions have been inconsistent, and arbitration language that is valid today may not hold up tomorrow. Yet little is known about how widely arbitration agreements are actually used.

Now, in what’s believed to be the first survey of its kind, we polled our subscribers to learn about their use of arbitration agreements and the problems they’ve encountered with employee acceptance. We received 538 responses from California employers, with staff sizes ranging from fewer than 19 to more than 1,000 employees.

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Arbitration Agreements Growing In Popularity

More than a quarter of employers who responded, 27%, said they require new employees to sign arbitration agreements. The number using these agreements grew 10% over the last 12 months.

Arbitration Requirement Rarely Raises Problems

The survey indicates that new hires rarely refuse to agree to mandatory arbitration. Eighty-eight percent of the respondents who required new workers to execute arbitration agreements in the past 12 months reported that no prospective employee had objected to signing. Eleven percent said employees “rarely” refuse.

Plus, only 3% of the employers who require new hires to agree to arbitration said they’d withdrawn a job offer because a prospective employee balked.

Employees More Accepting

Employees apparently aren’t voicing complaints about arbitration agreements either. Only 2% of respondents said they had “sometimes” received complaints over the past 12 months. Sixteen percent said they’d “rarely” received complaints over that period. And an overwhelming 82% said they had “never” received complaints in the past year.

Complaints about arbitration agreements are not only rare, they’re also slightly on the decline. No respondent reported receiving more complaints now than a year ago, and 94% said the number has stayed about the same. And 5% said they receive fewer complaints now than a year ago.

(Note that survey results don’t always equal 100%.)