When it comes to drafting an arbitration agreement, many businesses find themselves unsure of where to begin. While there is no one-size-fits-all approach to creating an arbitration agreement, there are certain provisions that should be included in order to ensure that the agreement is enforceable and effective.
To help businesses get started, we`ve put together a sample arbitration agreement draft that includes some of the key provisions that should be included.
Sample Arbitration Agreement Draft:
This agreement governs the resolution of disputes between [Company Name] and any current or former employee, independent contractor, or consultant of [Company Name]. By entering into this agreement, both parties agree to resolve any disputes that may arise between them through binding arbitration.
2. Scope of the Agreement
This agreement covers all disputes arising from or related to the employment or service relationship between the parties, including but not limited to: wage and hour disputes, claims of discrimination, harassment or retaliation, breach of contract, wrongful termination, and any other claims arising under federal, state, or local law.
3. Arbitration Procedures
Arbitration will be administered by the American Arbitration Association (AAA) or another mutually agreed upon arbitrator. The parties agree to follow the AAA`s Employment Arbitration Rules and Procedures, except as modified by this agreement. The arbitrator(s) will be selected in accordance with the AAA`s rules and procedures.
4. Selection of the Arbitrator(s)
Within seven (7) days after a claim is filed with the AAA, the parties will each select one arbitrator. If the parties cannot agree on a single arbitrator within fourteen (14) days after the selection of the first arbitrator, then the two arbitrators shall select a third arbitrator to serve as the presiding arbitrator.
5. Location of the Arbitration
The arbitration will take place in [City, State], unless otherwise agreed by the parties.
6. Governing Law
This agreement will be governed by the laws of the state of [State], without regard to its conflict of laws provisions.
All aspects of the arbitration proceeding, and any ruling, decision, or award by the arbitrator(s), will be strictly confidential for the benefit of the parties.
8. Waiver of Class Action and Jury Trial
Both parties agree to waive their right to a trial by jury and to bring or participate in a class action lawsuit regarding any dispute covered by this agreement.
If any provision of this agreement is held to be invalid or unenforceable, the remaining provisions will remain in full force and effect.
10. Entire Agreement
This agreement contains the entire understanding of the parties and supersedes all prior and contemporaneous agreements and understandings, whether written or oral.
By including these provisions, businesses can create an arbitration agreement that is both comprehensive and effective in protecting their interests. However, it is important to remember that each agreement must be tailored to the specific needs and circumstances of the parties involved. Consulting with legal counsel experienced in arbitration agreements is also recommended to ensure that the agreement is enforceable and legally sound.