Originally Published: December 23, 2025 | Updated: September 1, 2026
Table of Contents
• What Is an Arbitration Agreement?
• Why Employers Favor Arbitration
• How Arbitration Affects Employees
• Can a Sexual Harassment or Sexual Assault Claim Still Be Forced Into Arbitration?
• What Did the Supreme Court Decide in Jules v. Andre Balazs Properties?
• What Happens If I Have to Arbitrate My Employment Claim?
• What Did the Supreme Court Decide in Jules v. Andre Balazs Properties?
• What Can I Do If I’m Asked to Sign an Arbitration Agreement?
What Is an Arbitration Agreement?
An arbitration agreement is a contract term requiring many employment disputes to be resolved through a private arbitration process instead of a public court case. Depending on the agreement, it may cover claims involving discrimination, retaliation, harassment, unpaid wages, or wrongful termination.
Arbitration usually means that a neutral arbitrator—not a judge or jury—will decide the dispute. The process can limit pre-hearing discovery and generally offers only narrow grounds for a court to review the final award. Many agreements also include class and collective action waivers, which can prevent employees from bringing certain claims together with coworkers.
Why Employers Favor Arbitration
Arbitration agreements can limit an employee’s access to a jury trial, keep proceedings out of the public court system, and restrict the discovery process used to obtain company documents and testimony. The agreement may also designate a particular arbitration provider or selection process. Before signing, employees should review who pays the fees, how the arbitrator is selected, whether there is an opt-out provision, and whether the agreement includes a class or collective-action waiver.
How Arbitration Affects Employees
Studies show that employees win less often in arbitration and recover lower damages compared to court cases. Arbitration also makes it harder to draw public attention to systemic problems, especially in industries like:
- Retail
- Food service
- Healthcare
These sectors also employ higher percentages of women, people of color, and low-wage workers, raising concerns about fairness and discrimination.
In many cases, workers have no real choice but to accept these agreements if they want the job.
Can a Sexual Harassment or Sexual Assault Claim Still Be Forced Into Arbitration?
Not necessarily. Under the federal Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, an employee bringing a case relating to sexual assault or sexual harassment may choose to proceed in court despite a predispute arbitration agreement or class/collective-action waiver. The law applies to disputes that arose on or after March 3, 2022. A court—not the arbitrator—decides whether this federal protection applies.
Other workplace claims, including many discrimination, retaliation, and wage claims, may still be subject to a valid arbitration agreement. The agreement’s wording and the facts of the claim matter.
Key Legal Cases
2026 Update: Jules v. Andre Balazs Properties
In May 2026, the U.S. Supreme Court held that when a federal court stays an existing case so the parties can arbitrate, that court retains jurisdiction to consider a later request to confirm or vacate the arbitration award. The decision does not give employees a broad new right to appeal an unfavorable award, but it clarifies that the original federal court can continue supervising the case after arbitration ends.
Karen Ward v. Ernst & Young
Karen Ward sued Ernst & Young for sexual harassment. But because she had signed an arbitration agreement, she was forced into private arbitration, where she spent over $185,000 just to have her case heard. In contrast, filing a case in court could have cost her only a few hundred dollars.
Her case drew national attention and became a key example of how forced arbitration can silence victims.
Epic Systems v. Lewis
In this landmark decision, the U.S. Supreme Court ruled that employers can require workers to waive their right to join class-action lawsuits as part of arbitration agreements. This ruling made it easier for companies to enforce mandatory arbitration clauses and led to a spike in their use.
Recent Legislative Changes
In 2022, Congress passed a federal law banning forced arbitration in sexual harassment and sexual assault cases. This means employees can now choose to go to court for these types of claims, even if they signed an arbitration agreement.
However, other claims—like wage and hour violations, retaliation, and racial discrimination—can still be subject to forced arbitration.
Advocates are pushing for broader reform through the FAIR Act, which would ban forced arbitration in all employment cases. As of now, that legislation has not passed.
What Happens If I Have to Arbitrate My Employment Claim?
Arbitration commonly begins when the employee files a written demand with the arbitration provider identified in the agreement. The parties select an arbitrator under that provider’s procedures, exchange relevant information, and present evidence at a hearing. The arbitrator then issues a written award.
Arbitration is not the same as giving up your claim. Employees can still seek remedies such as unpaid wages, lost income, compensatory damages, and other relief permitted by law. However, the process and deadlines may differ from a court case, so it is important to review the agreement promptly.
What You Can Do If You’re Asked to Sign One
If you’re presented with an arbitration agreement at work, here’s how to protect yourself:
- Read it carefully
Look for phrases like “waive right to jury trial” or “class action waiver.” These are major red flags. - Ask if you can opt out
Some agreements allow you to decline arbitration within a set time (usually 30 days). Follow the instructions exactly and get confirmation in writing. - Assess your leverage
If you’re in a high-demand role or have multiple job offers, you might be able to negotiate different terms or remove the clause altogether. - Know your rights
Even if you sign, you can still file complaints with agencies like the EEOC or Department of Labor. Arbitration doesn’t block those paths. - Talk to a lawyer
Employment attorneys can review your agreement, explain your rights, and help you challenge unfair terms. Many offer free or low-cost consultations. - Talk to coworkers
If others are concerned, consider raising the issue as a group. Group discussions about workplace conditions are legally protected. - Understand the limitations
Arbitration doesn’t mean you lose all rights—but it changes how you assert them. You may lose access to a public trial or full discovery. - Stay updated
Laws are changing quickly. Follow updates on state and federal employment laws, especially those involving arbitration and worker protections.
Final Thoughts
Forced arbitration affects millions of workers and limits their access to fair and open legal processes. Understanding what these agreements mean—and what rights you may be signing away—is critical for protecting yourself at work.
If you’re unsure about an arbitration clause in your employment contract, don’t ignore it. Get informed, ask questions, and seek advice. Whether you’re a new hire or a long-time employee, knowledge is your best defense.
Forced arbitration isn’t just a legal technicality. It’s a real-world issue that affects your ability to speak up, get justice, and hold employers accountable. Being informed is your best protection.
Contact Us
If an arbitration agreement affects your workplace claim, contact The Spiggle Law Firm to tell us about your case.
[2] U.S. Supreme Court — Jules v. Andre Balazs Properties, No. 25-83
