When you take a job, you may be agreeing to more than you know. In the fine print of employment agreements, employee handbooks and job applications, many companies include a mandatory arbitration clause�meaning that you agree to give up your right to take any dispute to court, even if the employer has broken the law. Instead, the case goes to an arbitrator, who decides it privately, and "the grounds for appeal are extremely limited," says Donna Lenhoff, an attorney with the National Employment Lawyers Association. Lenhoff estimates that more than 30 million Americans are bound by arbitration clauses at work.
Employers�particularly those in financial services, health care and pharmaceuticals�often favor arbitration because it keeps costs down and cases out of the headlines, says Manesh Rath, a partner at the law firm Keller & Heckman. But, says Ms. Lenhoff, arbitration seldom works out well for employees. A recent study found that arbitrators decided in favor of employees just 30 % of the time, and when the individual arbitrator had worked previously on a case with the employer, the employee won only 12% of the time.
Ms. Reinglass says employees can often fare better in court. "Someone on a jury might relate to your experience in a way that an arbitrator may not," she says.