Senior executives of large global conglomerates often sign confidential employment contracts that mandate dispute resolution via a mandatory agreement to arbitration. If you are a senior executive and have been solicited to work and take on a new responsibility in a role with a global conglomerate corporation, you want to make sure to read the fine print in your employment contract.

Often on page 383 of a 400-page contractual agreement will be language to the effect “Employee agrees to mandatory dispute resolution via arbitration at the venue chosen at the sole discretion of employer.” Employer may be headquartered in Milan, Italy, Vienna, Austria, Frankfurt, Germany, London, United Kingdom or even as remote and as far away as Helsinki, Finland. If an employment dispute arises and you wish to enforce your legal rights such as payment of contractually bargained-for bonus payments or stock benefits or stock options, or relocation assistance or whatever other benefit or action in dispute, or if you contest your treatment by leadership at work, you may find yourself in mandatory arbitration in contradistinction to litigation in a court located locally in your individual jurisdiction.

Employment Law Claims

Generally speaking, most employment law claims concerning activities related to the employee-employer relationship are matters that can be resolved via arbitration. Claims involving salary, compensation, wages, unfair demotions or denials of promotion, allegations of unfair termination of employment are all generally accepted as viable for being arbitrated in an international context, especially claims involving financial matters in dispute.

How do you end up in arbitration without express awareness? You probably signed an arbitration agreement at the inception of employment. It is prudent to try and bargain for the terms and conditions of employment before formalizing the employee-employer relationship. The agreement to arbitrate is a crucial part of the analysis to see if international arbitration is applicable and enforceable. You may work in Austin, Texas for a major tech company, but if you voluntarily signed a contract in your employment relationship with your employer and a dispute arises, you may find yourself incurring expenses to appear for arbitration in London or any other international venue for resolution of your claims.

Benefits of Arbitration

What benefits does arbitration provide? Generally speaking, arbitration provides the opportunity for both parties; both the employer and employee access to neutral arbitrators approved by various arbitration associations. These arbitrators are authorized to issue binding decisions that are very unlikely to be collaterally attacked later via a lawsuit in a United States federal court.

Alex Rodriguez, for example, was forced to drop a lawsuit against Major League Baseball because his entire employment dispute was subject to binding mandatory arbitration. He did not like the outcome, but ultimately was forced to accept the results as the arbitration decision was highly unlikely to be set aside by a separate federal court proceeding.

Another benefit of handling your employment dispute via arbitration involves the generally applicable complete confidentiality of the proceedings. A lawsuit in federal court absent unique circumstances authorizing filing under seal or as “Jane Doe” generally creates openly accessible public records for the entire world to access. Dispute via arbitration is usually held in closed hearings not open to the general public and the filings of the parties, attorneys and arbitrators are not usually subject to public disclosure.

Organizations such as the American Arbitration Association (AAA), The London Court of International Arbitration (LCIA), Milan Chamber of Arbitration, The Italian Association for Arbitration, The Vienna International Arbitral Centre, The Finnish Arbitration Association and various other international bodies offer multiple venues for employer-employee dispute resolution. The Milan Chamber of Commerce which forms part of the Italy wide Chamber of Commerce, is the first Italian arbitration center that has promoted arbitration nationally and internationally and is today the leading arbitral institution in Europe.

Cost of Arbitration

While the cost of handling arbitration internationally may be quite steep, the loss of millions of dollars of stock benefits certainly should be taken into consideration as part of any cost-benefit analysis. Arbitration awards are enforceable similar to court judgments and parties bound to dispute resolution via arbitration can be compelled to comply with the issuance of an award issued via arbitration, making the enforcement of any recovery foreseeable and generally obtainable.

Before making any decision on proceeding forward it is vitally important to consult with qualified and capable counsel to fully evaluate your rights and potential avenues for recovery. The biggest benefit to dispute resolution via arbitration is primarily the privacy the proceedings provide as well as the enforceability of an award that can be issued far sooner than the generally long drawn-out federal court litigation process common across jurisdictions in the United States.

For employers protecting their interests or employees looking to safeguard their rights, professional legal advice offers peace of mind and legal certainty. Our knowledgeable employment attorneys can assist with making your contracts clear, comprehensive, and enforceable. Call 8885294543 or contact us online today for a consultation to discuss your employment agreement needs and secure a healthy employment relationship.

Sean C. Timmons, Esq. is the Managing Partner of Tully Rinckey PLLC’s Houston office. Mr. Timmons is an experienced military and employment law attorney, having spent several years serving in the United States Army Judge Advocate General’s (JAG) Corps prior to spending the past twelve years in private practice. Mr. Timmons is conversational in Italian, German, French and Spanish which helps him blend in with local cultures while advocating for clients around the world and frequently handles legal proceedings across Europe for clients of Tully Rinckey PLLC. Mr. Timmons holds an LLM from the University of Houston Law Center in International law and obtained his Juris Doctorate from South Texas College of Law in Houston, Texas. From Houston, Texas Mr. Timmons can access most of the world’s airports on short notice and frequently appears in proceedings around the world.