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Ability to choose litigation over arbitration

My employment contract stipulates that "... any and all disputes will be settled by final and binding arbitration to the fullest extent permitted by law", and that "the arbitration will be administered by the American Arbitration Association ". The company are refusing to pay the severance pay, and I think litigation in court would prove more advantageous to me. Could I file my claim in court, or is arbitration the only option open to me?

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Attorney answers (4)

Reputation Level 20
You could try suing in court, but the employer may prefer arbitration, precisely because it's advantageous to them/. If they file a petition to compel arbitration, your contract's artbitration clause will probably be enforced.

Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.
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Reputation Level 19
In other words, unless the employer waives its contractual right to arbitration, your lawsuit will be a waste of time and resources. Having said that, it is not uncommon for parties to try to litigate and see the case removed to arbitration.

Reputation Level 9
Despite the fact that there are arbitration provisions in their contracts, signatories often commence a suit in court, only to have it compeled to arbitration per motion by defendant. Filing a case in court is a costly endeavor. This great expense should be considered along with the very good liklihood that the case would be forced into arbitration anyway when deciding whether to file your case in court.

Reputation Level 15
Under Armendariz v. Foundation Health Psychcare Services, Inc., supra, 24 Cal.4th at 124-125, 99 Cal.Rptr.2d at 775; Ca Civil ยง 1670.5, some arbitration agreements can be overcome. You need to consult with an attorney that concentrates in the emlpoyment area and have them review the agreement.

Peter :)

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