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Former Employee must Arbitrate Discrimination Claim Because the Employment Agreement Constituted a Valid Contract

An employee signed an employment agreement four years after she began her employment with the employer. The agreement contained an arbitration clause that set out a three-step process for resolving employment disputes, including discrimination claims. The employee sought to have the agreement invalidated based on lack of consideration and lack of notice as to the arbitration provision. The U.S. Court of Appeals for the First Circuit held that the employee’s agreement to the alternative dispute resolution process in exchange for the employer’s promise to waive certain defenses satisfied the consideration requirement for contract formation. The court also held that the plain text of the agreement provided the employee with adequate notice that employment discrimination claims would be subject to arbitration. Accordingly, the court ruled that the employee was required to arbitrate her claims. In light of this case, employers should consider utilizing a carefully drafted arbitration clause in their employment agreements as a viable alternative to being forced to litigate discrimination claims.

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