Although arbitration clauses are commonplace in employment agreements, not all are created equal. For many businesses, arbitration provides a cost-effective and time-saving alternative to litigation. However, as the New Jersey Supreme Court recently said, an arbitration clause that fails to present arbitration as an employee’s only recourse does not preclude a lawsuit. Even though courts generally favor arbitration to litigation, a vague arbitration provision is not enforceable. In fact, the New Jersey Supreme Court said such clauses must inform an employee that he or she is waiving his or her right to sue in court. In light of this recent decision, it becomes important business owners consult a competent and experienced attorney to draft employment agreements with binding arbitration provisions.
LaVan Law provides its business clients years of experience in labor and employment issues. If you need assistance drafting employment-related documents or simply need to update existing employment manuals, please contact our office today.