What it means if your job asks you to sign an arbitration agreement

This page explains arbitration agreements at work. It is general information, not legal advice. For all your rights at work, see Your rights at work, with or without papers.

What is an arbitration agreement?

It is a promise, usually in your hiring papers or an employee handbook, that if you and your employer have a legal dispute later, you will not go to court. Instead, a private decision maker called an arbitrator hears the case and decides it.

Arbitration is like a small private trial. Each side presents evidence and witnesses. The arbitrator decides who wins and how much. There is no jury. The hearing is usually private, and the decision is very hard to appeal.

Many agreements also include a class action waiver. That means you agree to bring claims only for yourself, not together with coworkers in one big case. The U.S. Supreme Court has said courts must enforce these individual arbitration agreements in employment (Epic Systems Corp. v. Lewis, 2018).

Look for words like "arbitration," "binding," "waiver of jury trial," "dispute resolution program," or "class action waiver." Sometimes the agreement is a single paragraph in a longer document.

Do I have to sign it to get or keep the job?

In most cases, your employer can make signing a condition of the job. That is hard news, but it is better to know it before you decide.

California tried to stop this. A 2019 law, AB 51, made it illegal to force workers to sign arbitration agreements as a condition of work (Labor Code 432.6). In February 2023, a federal appeals court held that the federal arbitration law overrides AB 51 and kept an order in place blocking it (Chamber of Commerce v. Bonta). The court also said that an agreement signed in violation of AB 51 can still be enforced.

What this means for you:

• Before you start, an employer may say "no agreement, no job."
• If you already work there, an employer may roll out a new agreement and say that continuing to work means you accept it. Read every policy update.
• Some agreements have an opt out. A box to check, a form to mail, or a deadline such as 30 days. If yours has one and you want to keep the right to go to court, use it, in writing, and keep a copy.

Refusing to sign is your choice. Make it with your eyes open, and talk with a free clinic first if you can.

Is the agreement always valid?

No. California courts still check whether an employment arbitration agreement is fair. For claims under California's civil rights law (FEHA), the California Supreme Court set minimum rules in 2000 (Armendariz v. Foundation Health). A required arbitration agreement must:

• Use a neutral arbitrator
• Allow more than minimal sharing of evidence (called discovery)
• End with a written decision
• Allow all the remedies you could get in court
• Not make you pay costs you would not pay in court. The employer pays the arbitration costs.

The court also said an agreement that forces only the worker, and not the employer, to arbitrate is unfairly one sided. A judge can strike an unfair part or refuse to enforce the whole agreement if it is full of unfair terms.

Out of state rules are limited too. If you mainly live and work in California, your employer cannot require you, as a condition of the job, to settle a dispute outside California or under another state's law (Labor Code 925). You can cancel a term like that. This rule does not apply if you had your own lawyer negotiate those terms.

What if my claim is about sexual harassment or sexual assault?

You have a choice, even if you signed. A 2022 federal law lets the person who says they were sexually harassed or sexually assaulted decide not to use a predispute arbitration agreement or class action waiver for that case (9 U.S.C. 402). It covers cases under federal, state and tribal law. A judge, not an arbitrator, decides whether this rule applies.

If you are dealing with harassment now, see If you are sexually harassed at work.

I already signed. Can I still file a complaint?

Yes, you can still go to a government agency. An agreement between you and your employer does not bind the agency, because the agency did not sign it.

• Civil rights: the U.S. Supreme Court held that a worker's arbitration agreement does not stop the EEOC from suing an employer and asking for money for that worker (EEOC v. Waffle House, 2002). You can file with the EEOC or with California's Civil Rights Department (CRD). CRD's deadline is usually three years. See How to file a discrimination complaint in California.
• Unpaid wages: you can file a wage claim with the Labor Commissioner. If you signed an arbitration agreement, your employer may ask to move the case into arbitration; the U.S. Supreme Court has held that federal arbitration law can override California's rule letting wage cases go to court (Perry v. Thomas, 1987). If that happens, get help from a clinic quickly.
• Union and group activity: the NLRB enforces the right to act together with coworkers (NLRB). See Can I join a union at my job?
• Penalty claims for many workers (PAGA): if a judge sends your own claims to arbitration, you can still pursue the claims on behalf of other workers in court (Adolph v. Uber Technologies, 2023). This is a lawyer's tool. Ask a clinic.

Your immigration status does not change these rights. California's labor and civil rights agencies say they do not ask about status (CRD; Labor Commissioner).

What happens if my case goes to arbitration?

1. Someone starts it. Usually the worker files a demand with the arbitration company named in the agreement, or the employer asks a judge to send a lawsuit to arbitration.
2. An arbitrator is chosen. Check that the agreement lets both sides take part in choosing.
3. The employer pays. In California employment cases where the employer wrote the agreement, it must pay the fees within 30 days after they are due. If it pays late, you can usually take the case to court instead or keep going in arbitration. In 2025, the California Supreme Court said a late payment does not automatically end the employer's right to arbitrate if the delay was not willful, grossly negligent or fraudulent, and the employer makes up for the harm (Hohenshelt v. Superior Court). Write down every date.
4. Evidence is shared, then a hearing. You can bring papers and witnesses. Ask for an interpreter if you need one.
5. A written decision. It is final in almost every case.

Most workers in arbitration have a lawyer. Many employment lawyers work on contingency, which means they are paid only if you win. See Do I need a lawyer for a case against my employer?

What should I check before I sign?

Take a photo of every page or ask for a copy. Then look for these points:

• Is there an opt out? How do you use it, and by when?
• Who pays? It should say the employer pays the arbitration fees and costs.
• Is it two sided? Does it require the employer to arbitrate its claims against you too?
• What does it cover? Wages, discrimination, injuries, everything? Workers' compensation is usually handled in its own system. See Hurt at work.
• Where and under what law? If you work in California, the hearing should be in California under California law.
• Class action waiver? Does it stop you from joining coworkers in one case?
• Time limits? A shorter deadline than the law allows is a warning sign. Show it to a clinic.
• Language. If you do not read English well, ask for a copy in your language or have someone you trust read it with you. Do not sign what you do not understand.

You are allowed to ask questions. A fair employer will give you time to read.

Common mistakes to avoid

• Thinking signing means you have no rights. You keep your rights to minimum wage, safe work, and to be free from discrimination. Only the place where a dispute gets decided changes.
• Missing the opt out deadline. Put it on your calendar the day you get the papers.
• Waiting too long after a problem. Agency and court deadlines still run. Act soon.

Who can help?

These are free public offices and nonprofit clinics. Contact them to confirm hours, languages and openings. Being listed here is not a referral or a promise of service.

• Legal Aid at Work Workers' Rights Clinic: free and confidential for people within its income limits or age 60 and over. Main line 415-864-8848; East Palo Alto line (415) 404-9093. Workers' Rights Clinic
• California Labor Commissioner: wage claims and retaliation, with phone interpreters. 833-526-4636. How to file a wage claim
• California Civil Rights Department: discrimination and harassment. 800-884-1684, TTY 800-700-2320. CRD employment
• More options by county: Free help with a work problem in the Bay Area

Questions people ask

My boss says I signed it online when I clicked "accept." Does that count? It may. Clicking can count as signing. Ask your employer for a copy of what you accepted and the date.

Can arbitration stop me from talking about my case? Some agreements have privacy terms. Ask a lawyer before you share details in public. You can always talk to a government agency or a lawyer.

Does an arbitration agreement affect my immigration case? An arbitration agreement only decides where a work dispute gets heard. It is not an immigration paper. If your employer threatens to call immigration, that is a separate violation. See If your boss threatens to call immigration.

I refused to sign and was not hired. Can I do anything? Because AB 51 is blocked, there may be no claim for that alone. If you think the real reason was discrimination or retaliation, talk to a clinic.

Is there a list of questions I can print?

You do not have to figure this out alone. Read it, ask, and get free help if something feels wrong.