When an employee signs a contract with a forced arbitration clause, they typically waive their right to take employment-related disputes to court, including claims related to workplace discrimination, harassment, wrongful termination, and wage disputes (Castro, 2022). Instead, disputes are resolved through arbitration, a private and less formal process. Many forced arbitration clauses also include class-action waivers, which means that employees cannot join together to bring collective legal action against the employer, even if multiple employees face similar issues. This can weaken the bargaining power of individual employees.

Arbitration proceedings are typically confidential, meaning that the details of the dispute and its resolution remain private. This can make it harder for other employees to learn about potential issues within the workplace. Critics argue that arbitration can be biased in favor of employers, as companies often choose and pay for the arbitrator. This raises concerns about impartiality and fairness. Arbitration decisions do not create legal precedent in the same way that court rulings do. This means that rulings in arbitration cases may not have the same impact on future cases or contribute to the development of employment law.

Besides employment contracts, forced arbitration clauses are used in various consumer contracts, such as agreements for credit cards, cell phones, and online services. They are also present in nursing home agreements, medical consent forms, and more. These clauses are often included to limit a company's legal liability and deter individuals from pursuing legal action.

Whether one agrees or disagrees with the use of forced arbitration in employment contracts depends on their perspective and values. Arbitration can be quicker and less expensive than litigation, benefiting both employers and employees. Arbitration keeps disputes confidential, which can protect the reputation and privacy of both parties involved. In some cases, employees may have the option to accept or reject a job offer with a forced arbitration clause, giving them some choice.

Those against forced arbitration can limit accountability for employers' actions and develop a culture of secrecy. Employees often have little negotiation power when it comes to contract terms, including arbitration clauses. The confidential nature of arbitration can hide patterns of misconduct within a company. The perception of bias in favor of employers can erode trust in the arbitration process.

Ultimately, the question of whether forced arbitration is fair or just depends on one's perspective and values. Public opinion and legal regulations on this issue have evolved over time, with some jurisdictions taking steps to limit the use of forced arbitration in certain contexts to protect the rights of employees and consumers.