HRCI SPHR Practice Test 3

Herb is the HR Professional for his organization. He is preparing to hire a new employee, Hans, to the firm. Herb has asked Hans to agree, in writing, to mandatory arbitration as part of the employment offer. What does this agreement mean?
It means that Hans cannot work for competitors without the written permission of the employer.
It means that Herb's firm can research Hans to determine if he's had any lawsuits.
It means that Hans must file all legal complaints with the organization's attorney, before filing a lawsuit against the organization.
It means that Hans and the organization must settle all disputes, if any arise, through a neutral third party rather than through a lawsuit.
Answer option D is correct.
Mandatory arbitration helps the organization avoid lawsuits, should any arise, between the employee and the employer, by agreeing up-front to settle potential disagreements through an arbitrator versus a lawsuit.
Answer option A is incorrect. This answer describes a non-compete agreement.
Answer option B is incorrect. This isn't a valid answer for the mandatory arbitration agreement.
Answer option C is incorrect. Hans doesn't need to file legal complaints with his employer under this agreement. The agreement means that Hans and the employer will settle the problem without a lawsuit.
Chapter: Employee and Labor Relations
Objective: Dispute Resolution