Is arbitration worth it anymore? Most employers would have said “yes” without a second thought. Curiously, however, some of the nation’s most prominent companies have recently been moving away from this practice and ending mandatory arbitration policies that had been in place for decades—begging the question of “why now?” Based on this sudden change, it’s important to make sure you understand this trend against arbitration, the pros and cons of eliminating your own policy, and the potential changes in the legal landscape to watch for.

What Is Arbitration and Can Employers Still Require It?

Arbitration is a valuable alternative to litigation. Agreements to arbitrate require the parties to pursue their claims before a private arbitrator (i.e. usually a retired judge) outside of the normal court system. By doing so, the parties are often able to keep the matters confidential and avoid the delays and costs traditionally associated with bringing claims through the courts. As a result, many employers often choose to require their employees to consent to mandatory arbitration as a standard condition of their employment.