Philadelphia Business Lawyers: Arbitration Clauses Not Always Enforceable or Advisable

Arbitration is an alternative to litigating in court and it may lead to a cheaper and more expedient result. It also may be favorable to both sides in certain situations, particularly when it concerns two equal parties with access to equivalent resources saving time and money for all concerned. However, arbitration is often a disadvantage when the playing field is not level,  and for that reason, it is a common tool used by big business against consumers and employees.

Recently the American multinational technology conglomerate, Cisco, tried to force a lawsuit by one of its employees into arbitration and lost in San Francisco Superior Court. An employee filed an age discrimination claim against Cisco. The company responded by stating that the employee had given up the right to sue when she signed her employment contract because it included a clause that said any disputes must be settled by binding arbitration. However, the clause about arbitration was buried within a form that was mainly about intellectual property claims – something every employee must sign in order to be able to work at Cisco.

Judge Harold Kahn ruled that in effect, Cisco had surprised the employee with the arbitration requirement by putting the language in one paragraph on page five of a seven page, single spaced document about proprietary information. Moreover, the language stated that the employee was also obligated to pay half the costs of any employment disputes that went to arbitration, which is against California regulations.

Arbitration is a Common Practice for Companies

Cisco is not the only company trying to use arbitration to its advantage. Wells Fargo is still recovering from the scandal that broke when the practice of opening multiple accounts in a customer’s name without their knowledge became public. Victims seeking justice were forced into binding arbitration by the bank. The original accounts had a clause about arbitration which the bank said also applied to any subsequent disputes. Due to the fact that most results of arbitration cases are not a matter of public record, the scale of the Wells Fargo scandal was kept under wraps for longer than it would have been in a court of law.

Philadelphia Business Lawyers at Sidkoff, Pincus & Green, P.C. Defend Those Being Forced Into Arbitration

Consumers and employees need to be aware of arbitration clauses because they are extremely common. At Sidkoff, Pincus & Green, we have experience representing consumers and individuals in arbitration matters, and in court.

If you have a matter that is in arbitration, or you are concerned about signing a contract with an arbitration clause, please feel free to contact the Philadelphia business lawyers at Sidkoff, Pincus & Green, P.C.. Call us at 215-574-0600 to schedule an appointment or contact us online. We serve clients throughout Pennsylvania and New Jersey.