Oregon Employee Arbitration Agreements: Advantages and Proper Implementation

In our last article, Green Light addressed some common questions employers have related to agricultural labor, including proper classification of certain agricultural workers as employees or independent contractors. One takeaway from this inquiry is that workers who fit the definition of employees as opposed to independent contractors should be hired as employees or the employer runs the risk of penalties from state and federal tax departments, among other potential issues. As a result, to avoid these risks, employers may end up hiring more employees.

As an option to limit or minimize costs should any employment disputes arise, employers may want to consider presenting employees with arbitration agreements. Arbitration is generally faster, more economical and has less variables than litigating in Oregon’s circuit courts – most notably, the lack of a jury. However, employers should be aware of Oregon’s statutory requirements to compel arbitration in the context of employment disputes. Specifically, Oregon law mandates that the employer provide written notice that an arbitration agreement is required as a condition of employment and that the employee be presented with the agreement for their signature at least 72 hours (3 days) before their employment begins. (See ORS 36.620) Further, the requirement must contain the following language in boldfaced type: “I acknowledge that I have received and read or have had the opportunity to read this arbitration agreement. I understand that this arbitration agreement requires that disputes that involve the matters subject to the agreement be submitted to mediation or arbitration pursuant to the arbitration agreement rather than to a judge and jury in court.”

While an employer generally stands to benefit from enforcement of an arbitration agreement, it should be noted that in some circumstances there may be cons as well. Chief among them are the inability for the employer to appeal any decision and a more limited ability to conduct discovery. Regardless, if an Oregon employer wants to compel arbitration, timely provision of a properly drafted arbitration agreement is a must.

If you have any questions, please reach out to us at Green Light Law Group (503) 488-5424.