Mandatory Arbitration Agreements in Ohio: Your Rights

The Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq., is the primary federal law governing arbitration agreements in employment. The FAA provides that written agreements to arbitrate disputes shall be valid, irrevocable, and enforceable except on grounds that would apply to any contract. Under the FAA, employers in all states may require employees to arbitrate employment disputes, including discrimination claims under Title VII, the Age Discrimination in Employment Act (ADEA), the Americans with Disabilities Act (ADA), and similar federal statutes.

The Equal Employment Opportunity Commission (EEOC) does not require employees to arbitrate EEOC charges (the administrative filing step), but employers may require arbitration of underlying disputes. The Supreme Court has consistently upheld arbitration agreements in employment, including in AT&T Mobility v. Concepcion (2011) and Epic Systems v. Lewis (2018), which held that collective action waivers and class action waivers in arbitration clauses are enforceable.

Federally, arbitration agreements must be mutual—both employer and employee must be bound to arbitrate—and cannot waive substantive statutory rights, though they may limit remedies or procedures. The FAA preempts state laws that specifically target arbitration agreements, though generally applicable contract principles apply.

Ohio law on arbitration agreements is governed primarily by Ohio Revised Code § 2711.01 et seq., which adopts principles similar to the Federal Arbitration Act. Ohio courts strongly favor enforcement of arbitration agreements and apply a deferential standard, consistent with federal policy. However, Ohio courts will decline to enforce an arbitration agreement if it is unconscionable, either procedurally or substantively.

Under Ohio case law, procedural unconscionability examines whether there was unequal bargaining power, lack of opportunity to negotiate, hidden or unclear terms, or surprise in presenting the agreement. Substantive unconscionability focuses on whether the agreement is unreasonably favorable to the employer—for example, an arbitration clause that allows only the employer to initiate arbitration, requires the employee to pay prohibitive arbitration fees, eliminates statutory remedies, imposes extremely short filing deadlines, or includes a confidentiality clause that prevents the employee from discussing the award.

Ohio courts are more protective than federal courts on certain issues. In particular, Ohio courts have been skeptical of one-sided arbitration clauses and have struck down agreements where the employer required arbitration but retained the right to litigate in court. Additionally, Ohio recognizes certain exceptions to arbitration: agreements may not eliminate rights under Ohio's workers' compensation laws, and Ohio courts scrutinize waivers of the right to a jury trial more carefully than federal courts do.

Ohio employers of any size may require arbitration agreements; there is no employee threshold. However, Ohio does not expand federal protections beyond what the FAA and federal statutes provide. Critically, while arbitration agreements are enforceable, Ohio courts will apply state contract law principles (mutual assent, consideration, absence of fraud) and will not enforce agreements that lack these basic elements or that are one-sided.

Arbitration agreements are not enforceable if they violate fundamental principles of Ohio contract law. Unconscionability—either procedural (unfair bargaining process) or substantive (unfair terms)—is the primary exception. An agreement may be unconscionable if the employee had no meaningful opportunity to negotiate, was not informed of key terms, or was required to sign as a condition of employment with no alternative.

Substantive unconscionability can arise if the arbitration clause is one-sided—for instance, only the employer can initiate arbitration while the employee cannot, the employer is exempt from arbitration while the employee is not, or the agreement requires the employee to pay all arbitration costs while the employer pays none. Ohio courts have also rejected confidentiality clauses that prevent the employee from discussing the arbitration or award, as these may conflict with employee rights under the National Labor Relations Act.

Arbitration agreements may not eliminate rights under workers' compensation law. Additionally, if an arbitration agreement waives the right to a jury trial, Ohio courts scrutinize whether the waiver is clear and conspicuous; hidden or ambiguous jury trial waivers may be unenforceable.

Certain statutory claims may be exempt. While federal law permits arbitration of discrimination and wage-hour claims, some Ohio statutes or local ordinances may provide limited exceptions for specific remedies or administrative procedures. However, these exceptions are narrow.

Union employees: If a union collective bargaining agreement addresses arbitration, the arbitration clause in that agreement generally controls individual arbitration agreements, and federal law strongly defers to arbitration clauses negotiated by unions. At-will employment exceptions do not apply; arbitration agreements are enforceable regardless of at-will status, provided they are mutual and not unconscionable.

Step 1: Document the Arbitration Agreement and Circumstances. Obtain a copy of the arbitration clause or full arbitration agreement you signed (or were asked to sign). Note the date you signed or received it, whether you were given time to review it, whether you were told it was a condition of employment, whether you asked questions, and whether anyone explained it to you. Take screenshots or photographs of the original if provided electronically. Preserve all emails, notices, or other communications related to the agreement. Document whether the agreement is one-sided (e.g., only you must arbitrate, not the employer) and whether it requires you to pay arbitration fees or waives your right to a jury trial.

Step 2: Evaluate Whether to Challenge the Agreement Internally. Before filing a charge or lawsuit, consider whether the employer has an internal grievance process or appeals procedure. Some employers offer an opportunity to contest the enforceability of an arbitration agreement or to seek a modification before it takes effect. Send a written email to HR or your manager (keep a copy) stating your concerns about unconscionability, unfairness, or hidden terms, and ask whether the agreement can be modified or waived. Request a response in writing. This creates a record and may prompt the employer to reconsider or reveal additional information about the agreement's terms. However, this step is optional and does not waive your rights.

Step 3: File an EEOC Charge or State Complaint if Arbitration Agreement Relates to Discrimination or Wage-Hour Violations. If the arbitration agreement was signed in connection with a discrimination claim (race, gender, age, disability, sexual orientation, religion), a wage-and-hour violation, or harassment, you may file a charge with the Equal Employment Opportunity Commission (EEOC) at eeoc.gov or with the Ohio Civil Rights Commission (OCRC) at crc.ohio.gov. The EEOC will investigate your underlying claim; you cannot be forced to arbitrate the EEOC charge itself, though the employer may later compel arbitration of your private lawsuit. File within 180 days of the adverse action (or 300 days in a deferral state like Ohio, where charges may be filed with OCRC first). Provide copies of the arbitration agreement with your charge; the EEOC will consider enforceability during investigation.

Step 4: Prepare to Challenge Enforceability if Sued or if You File a Private Claim. If you file a lawsuit or the employer sues you to compel arbitration, the employer will likely file a motion to compel arbitration under the Federal Arbitration Act (9 U.S.C. § 3). Your attorney will file a written opposition arguing that the agreement is unconscionable, one-sided, or procured by fraud. You will need to provide evidence that the agreement was unfairly presented, that you did not understand its terms, that you had no opportunity to negotiate, or that the terms are unreasonably favorable to the employer. The court will hold a hearing on the motion; you may be required to testify about the circumstances under which you signed.

Step 5: Consult an Employment Attorney Immediately. Do not attempt to challenge an arbitration agreement on your own. An employment law attorney licensed in Ohio can review the specific language of your agreement, assess whether it is unconscionable under Ohio law, advise whether to challenge enforceability or proceed to arbitration, and represent you in motions to compel or in the arbitration itself. Consult an attorney before signing an arbitration agreement if possible, or immediately after one is presented. Many employment attorneys offer free initial consultations. If you cannot afford an attorney, contact the Ohio State Bar Lawyer Referral Service (www.ohiobar.org) or a local legal aid organization.