Although favored by employers, will arbitration agreements in the employment context become a thing of the past? Arbitration agreements within the confines of the employment relationship require employees to pursue work-related claims in arbitration, rather than in court. In addition to requiring employees to pursue their claims against their employers in alternative dispute resolution, these agreements often contain a class action waiver clause, which require the employee to agree to resolve employment claims on an individual basis, thereby barring the employee from pursuing or joining a class or collective action. Therefore, if an employee has signed one of these agreements containing such a waiver, in the event of a violation of the Fair Labor Standards Act (FLSA), for example, the employee would be prohibited from initiating an action in court or joining a class action.

Employers favor arbitration agreements because such proceedings offer expeditious, cost-effective resolutions shrouded in secrecy, while class actions waivers provide the added protection of avoiding large payouts to classes of employees. Without such agreements, the alternative is the judicial system. Courts are open proceedings with accessible dockets that allow for public scrutiny, which employers would like to avoid at all costs. Civil rights activists and employee rights groups, on the other hand, lobby against such agreements, arguing that they are one-sided and oppressive, since employees have little bargaining power to avoid signing them, and then must pay attorney and arbitrator fees in order to enforce an alleged wrong against them.