Arbitration
Many disputes are better resolved through arbitration than litigation. Employment issues, commercial disputes, and even family law matters benefit from the quicker and cheaper arbitration process.
When you face binding arbitration in your legal dispute, a California arbitration attorney can guide you through the legal process and fight for a fair award in your case.
Understanding Arbitration Proceedings in California
Arbitration is a form of alternative dispute resolution. Rather than using the state or federal court system to resolve disputes, the arbitration process uses a private arbitrator. An arbitration is not a free-for-all. The California Arbitration Act governs the process used by arbitrators in the state.
According to state law, an arbitration must be conducted by a neutral arbitrator who must follow the state’s ethical rules. These rules were derived from the American Arbitration Association’s code of ethics for arbitrators. They demand that the arbitrator disclose any potential or actual conflicts and conduct an unbiased arbitration process.
California requires arbitration proceedings to include a discovery process so the parties can exchange documents and other evidence before the arbitration hearing. The arbitrator hears evidence and legal arguments from each party and issues an arbitrator’s decision.
The decision is supposed to follow the law that applies to the case. However, arbitrators have more leeway to craft a fair outcome than judges or juries.
If your case involves binding arbitration, the parties will have limited grounds to challenge the arbitration award. Specifically, California law limits challenges to the following grounds:
- Corruption or fraud by a party in procuring the award
- Corruption or misconduct by an arbitrator
- The arbitrator exceeded their powers, and a court can correct the award
- The arbitrator refused to follow the California Arbitration Act
- The arbitrator refused to hear relevant evidence
- The arbitrator refused to postpone the hearing after a party presented a sufficient reason for delay
- The arbitrator failed to disclose conflicts or other grounds for disqualification
Fortunately, you can avoid many of these issues because both parties participate in selecting the arbitrator.
Benefits of Using Arbitration in California to Resolve Disputes
As a form of alternative dispute resolution, arbitration is less formal than litigation. Arbitrators are not bound by the rigid rules of civil procedure and evidence used in a lawsuit. As a result, you can often present a fuller picture of the dispute to an arbitrator than you could present in court.
Arbitrations are also faster than litigation. Although your case will include a discovery phase, it will likely be shorter and more limited in scope than the discovery process for a lawsuit.
Moreover, your arbitration costs will likely be lower than the litigation costs for a similar dispute. In employment arbitrations, the employer must pay the arbitration costs.
The arbitrator in a binding arbitration has the power to order the same remedies that you could get in court. Thus, you can seek the same outcome through arbitration as litigation.
Another benefit of arbitration is that the parties pick the arbitrator. Litigations are assigned randomly to judges. By contrast, arbitrators are typically chosen when each party makes a list of possible arbitrators. The parties agree on one who appears on both lists.
Importantly, an arbitrator does not need to be a judge or even a lawyer. You can pick someone who has experience with alternative dispute resolution or knowledge in a particular area. For example, you can pick a university professor who has written about sexual harassment to arbitrate your hostile work environment case.
Arbitration is also a low-conflict form of dispute resolution. While some arbitrations can get heated, they also require some level of cooperation between the parties to pick an arbitrator and agree on the procedural rules. This cooperation can open the door to negotiation or mediation of the dispute, allowing the parties to avoid arbitration altogether by settling the claim.
When to Hire a California Arbitration Lawyer
You should consider hiring legal representation anytime you face non-binding or binding arbitration. You are entitled to have an attorney represent you during discovery and at the arbitration hearing.
The California arbitration lawyer you hire can provide experience and knowledge in dealing with the arbitration process so that the opposing party does not take advantage of you. Moreover, a lawyer can protect your legal rights to a fair process and a neutral arbitrator, putting you in the best position to get a positive arbitrator’s decision.
Arbitrations are a common tool for resolving employment disputes. Many employers require workers to sign arbitration clauses when they are hired. Others present existing employees with arbitration agreements as their legal counsel works to get a uniform process for dealing with employment issues like race discrimination claims.
Consider speaking to an attorney to review your arbitration agreement before you sign it. You should also discuss the actions your employer can take if you refuse to accept an arbitration provision in your employment agreement.
Preparing for the Arbitration Process With Your Lawyer
The first step in preparing for arbitration is to discuss your case with an attorney. The law and facts dictate the strength and value of your case. In some situations, the cost of arbitrating or litigating a dispute might not be justified by the outcome you can expect. In these cases, you should consider negotiation or mediation to resolve your dispute.
You and your attorney will also discuss your legal options. Sometimes, you have a choice between litigation and arbitration. You can discuss the benefits and drawbacks of each process so you can choose the one that fits your needs and goals.
Once you are committed to arbitrating your case, your California arbitration lawyer will devise a legal strategy to prove your side of the story. Although arbitration is not part of the judicial system, it does rely on legal principles. You must have evidence and legal arguments to support your claims.
Thus, you and your lawyer will identify and gather the evidence you need to prove the elements of your case. This evidence may include the following:
- Your testimony
- The testimony of the opposing party
- Documents, such as records and communications
- Physical evidence
- Witness testimony
Arbitrations must include a discovery process for gathering evidence under California law. However, many cases use a shorter and narrower process than the parties might use in litigation. Specifically, the arbitrator might limit the number of depositions or discovery requests and limit their scope to specific issues.
An arbitration culminates with an arbitration hearing. During this hearing, the parties present evidence to the arbitrator. This process may involve more flexible rules than a court hearing or trial.
For example, an arbitrator might ask questions to try to develop the fullest possible understanding of the case. Judges and jurors, by contrast, generally do not question witnesses, lawyers, or the parties directly.
Thus, the final step to preparing for arbitration is to plan the presentation. You and your attorney want to present the clearest and strongest possible case so the arbitrator can issue a written decision in your favor.
California Civil Rights Law Group Knows Alternative Dispute Resolution
Our firm has extensive experience handling high-stakes arbitrations. We level the playing field when you have a dispute with a large company with power and resources. Our attorneys fight hard within the legal rules for arbitrations.
At the same time, most disputes are resolved through negotiation or mediation, so we will also work diligently to find a solution that the parties agree on. Contact us to discuss your legal dispute and learn how we can help you resolve it through arbitration.
FAQ
Our clients often ask the following questions when facing arbitration:
Although the arbitration process is less costly than litigation, the costs associated with the arbitration can still reach thousands of dollars. However, the California Arbitration Act requires the drafting party, such as the employer, to pay these costs. Thus, you are only responsible for your arbitration attorney’s fee.
California’s former arbitration law prohibited all mandatory binding arbitration clauses in employment disputes. However, courts invalidated this law because it conflicted with the Federal Arbitration Act.
Consequently, you will probably be required to arbitrate according to the arbitration clause you signed, even though California tried to prohibit employment arbitration.
California arbitration laws have several rules that apply to mandatory binding arbitration agreements, including the following:
- They must be fair
- They must be supported by consideration
- They must be clear
- They must not involve duress or fraud
Finally, they cannot be required for workers involved in interstate or international transportation.
The arbitration process is neither better nor worse than litigation. It is merely different. Arbitration is faster and less expensive. However, you may have a shorter period and fewer tools to seek evidence from your employer. Moreover, an arbitrator might not be as sympathetic to your situation as a jury.
Employers cannot force workers to sign arbitration agreements. However, an employer may choose not to hire you if you refuse to sign the clause during onboarding. It can also terminate you if you refuse to sign an arbitration clause after you have already been hired.
Employers can ask workers to sign arbitration clauses after they have already started working. The employer can threaten to terminate anyone who refuses to agree to arbitration. If your job involves anything other than the interstate transportation of goods or people, the employer can follow through and fire you.
Courts will enforce valid arbitration clauses in employment cases. Determining whether a clause is valid depends on factors such as the language’s clarity. Federal laws favor the enforceability of arbitration clauses for most workers, so the odds are high that a court will enforce any arbitration provision you sign.
The time for arbitration will usually be much shorter than that for litigation. The arbitration process can often end in a few months, while litigation can take years. However, the exact duration will depend on many factors, including the complexity of the legal and factual issues and the discovery schedule.
The losing party in an arbitration can use the court system to vacate an arbitration decision. However, the California Arbitration Act limits the grounds for challenging an arbitration to flaws in the arbitration process, such as fraud, corruption, or an order that exceeds the arbitrator’s powers.
A prospective employer can withdraw your job offer when you refuse to sign an arbitration clause. Similarly, your employer may fire you if you refuse to agree to sign. If you have already signed it and have a dispute that falls within it, you must arbitrate or you will breach it.
