Arbitration agreements require legal disputes to be resolved through arbitration instead of the U.S. court system. Originally, they were used between two business entities that knowingly agreed to handle disputes this way because arbitration is often faster and cheaper than litigation.

However, in recent decades, employers have started using these agreements with employees — often in new hire paperwork — because it protects them from legal liability even if they knowingly violate an employee’s rights. These agreements allow employers to avoid accountability, as employees often don’t realize what they’ve signed until it’s too late.