Arbitration is a dispute resolution alternative to civil litigation. It invloves an indepedent third party that acts as a fact finder, listens to both sides of the problem, then decides what the solution shall be. The process is called "binding arbitration" only if the parties must abide by the award.

Employment aribitration, according to federal and state laws, and court decisions applying those statutes, have redefined responsible corporate practice and employee relations. Employers and employees, each in their own respect, are faced with issues that can ultimately be defined as wrongful termination, discrimination, or sexual harrassment. To resolve their differences they may access the alternative dispute resolution process offered by the American Arbitration Association. 

Arbitration and mediation are time-tested, cost effective alternatives to litigation. Arbitration is the submission of a dispute to one or more impartial persons for a final and binding decision, known as an "award." Awards are generally final and binding on the parties in the case.

Mediation, on the other hand, is a process in which a third party does not make an award but moves the parties toward making the decisions to resolve the matter. There is an opportunity to mediate within the arbitration process.

The arbitration process is more complicated than mediation. The employer should have an alternative dispute resolution plan in place that had previously been approved by the American Arbitration Association. These plans typically include such things as anti-harassment policies, appointment of third parties as neutrals to internally resolve workplace disputes, an internal complaint procedure, and an effective arbitration agreement.

Arbitration also permits the use of discovery if approved by the agreed upon arbitrator. This could include the taking of depositions, the use of interrogatories, notices to produce documents, and a set of admissions as examples. In addition, the actual arbitration is more like a trial setting where witnesses can be called and cross-examined by the parties or arbitrator.