Employers who subscribe to workers’ compensation insurance enjoy the benefit of insulating themselves from litigation brought by employees for work related injuries. Under the worker’s compensation system, workers’ compensation benefits are an employee’s exclusive remedy. This is not true for non-subscribers, who are still susceptible to lawsuits brought by injured employees, even if the employee also enjoyed the benefits of the employer’s injury plan.
However, this does not mean that non-subscribers don’t have other means to protect themselves from costly litigation battles. As a non-subscriber, employers can contractually require that most employee injury disputes be resolved through arbitration instead of litigating through the court system. Arbitration clauses are contractual agreements with employees that typically require both parties to agree to mandatory arbitration for any disputes arising out of the employer’s injury plan. The clauses can even require that disputes over whether a claim is even subject to arbitration also be arbitrated. Arbitration is designed to be faster and cheaper than litigation and helps the employer keep the cost of its injury plan low while also giving the employee a faster resolution for whatever grievance the employee may have.
Employers should include all arbitration provisions within its injury plan and make sure the employee has notice of the arbitration clause. While having the employee sign the arbitration provision is often the most obvious way to ensure they had notice, it is not required. As long as the employee had notice of the arbitration policy, their choice to continue working for the employer will typically constitute acceptance of the policy and protect the employer from lawsuits over the employee’s injuries.