Here’s something to consider when you decide to add an arbitration clause to applications and require employees sign them as a condition of employment: You may end up forcing the employee into arbitration, but still become embroiled in other related litigation.
Recent case: Marie signed up for training as a pilot with a pilot school. She signed an arbitration agreement.
When she sued after an instructor allegedly sexually harassed her and the school terminated her participation for complaining, the school asked the court to send the case to arbitration.
The court agreed the arbitration agreement was valid. But since Marie had also sued the alleged harasser, she was allowed to continue the lawsuit against him in federal court. As a practical matter, the flight school now has to fight the allegations on two fronts. (Klein v. ATP Flight School, et al., No. 14-CV-1522, ED NY, 2014)