Yes, but there’s a caveat: Although recent decisions from federal (including the U.S. Supreme Court) and state courts have encouraged employment arbitration agreements, the issue of whether such agreements are enforceable has not been fully and finally settled in all jurisdictions. For example, at least one federal Court of Appeals has ruled that employers may not force employees to arbitrate discrimination claims under federal law (e.g., claims for unlawful race, sex, disability, or age discrimination).

In contrast, many state courts, including the California Supreme Court, have ruled that agreements to arbitrate employment claims, including discrimination claims under state law, are enforceable
provided they guarantee certain fairness and due process standards.
To be fair and to meet due process guidelines, arbitration
agreements must not be ‘‘unconscionable’’ or be otherwise procedurally biased against the employee in the eyes of the court.

What are the advantages to a company of compelling arbitration
rather than allowing for a trial court to hear a case? Saved time
and money—lots of it. It’s generally true that arbitration is advantageous to employers because it often reduces the costs of litigation, imposes some reasonable limitations on discovery, and grants plaintiffs smaller awards than a court or jury verdict. In addition, arbitration generally reaches resolution much faster than traditional litigation.

There are also advantages for employees: Generally speaking, arbitration is inexpensive, efficient, and allows workers to be ‘‘heard’’ on a timelier basis, that is, closer to the triggering event. This sometimes increases the chances of a successful resolution because the employee doesn’t stew over the problem for months or years before getting to trial

Taken From : The Hiring and Firing Quention and Answer Book