An arbitration agreement under section 7 is a legal contract between an employer and an employee that requires any disputes or claims arising from their employment relationship to be resolved through arbitration, rather than through traditional court proceedings.

This type of agreement is commonly used by employers as a way to limit potential legal liabilities and to create a more efficient and cost-effective dispute resolution process. Generally, section 7 arbitration agreements are included in an employee’s initial employment contract and may be presented as a mandatory requirement for employment.

Key provisions of a section 7 arbitration agreement may include:

1. Agreement to arbitrate: This provision outlines that the parties have agreed to resolve any dispute through arbitration rather than through the courts.

2. Arbitration rules: This provision may outline the specific rules and procedures to be followed during the arbitration process, either by referencing an established set of rules, such as those established by the American Arbitration Association, or by outlining specific procedures to be followed.

3. Selection of arbitrator: This provision outlines how the arbitrator will be selected and may include requirements such as the selection of a neutral third-party arbitrator.

4. Venue: This provision may outline the location where the arbitration will be conducted.

5. Limitation on remedies: This provision may limit the remedies available to the employee, such as limiting the types of damages that can be sought or capping the amount of damages that can be awarded.

While section 7 arbitration agreements can be an effective way for employers to limit their legal exposure, they can also raise concerns for employees. One key concern is that arbitration can limit an employee’s ability to have their claims heard in open court and in front of a jury. Additionally, the arbitration process is often less transparent than court proceedings, which can make it difficult for employees to fully understand what is happening during the arbitration process.

It is important for employees to carefully review any arbitration agreements offered to them before accepting a job. If an employee does not agree to the terms of the agreement, they may need to negotiate with their employer or seek legal advice.

In conclusion, a section 7 arbitration agreement is a legally binding contract that outlines how disputes between an employer and an employee will be resolved through arbitration. While these agreements can limit legal exposure for employers, they can also raise concerns for employees. Careful review of any arbitration agreement before acceptance is crucial for employees.