In many businesses, it is standard practice to include a clause requiring arbitration as part of an employment contract. By agreeing to this clause, an employee agrees to arbitrate any employment-related disputes rather than take them to court. It's crucial to realize that arbitration is a kind of conflict resolution that all parties must abide by. This means that after an arbitration has taken place, an employee cannot bring a lawsuit in court.

Arbitration is a legally binding process, yet it is frequently quicker and less expensive than courtroom action. Arbitration can also be less formal than a court case, which may be advantageous for some workers. Arbitration can be private as well, which is beneficial for workers who don't want their claims to be made public.