Update: I have hired an attorney, but would like to get opinions of folks who have encountered situations like this before to see how they handled it. I am not seeking legal advice.
First off, I live in a right-to-work state, so my rights and recourse is very limited if they decide to fire me over this.
I signed on for a six month right-to-hire contract back in November. Everything has been fairly normal - great actually - until I got an email from the contracting agency saying that they needed to "update some paperwork." Apparently they have changed from a corp to an LLC and wanted all the paperwork re-signed with the LLC on the agreement. No problems signing all the things I've already agreed to, but they have slipped in a binding arbitration agreement. There is zero advantage I can think of in waiving my rights to legal recourse by signing this. I replied to them that I was not comfortable signing it and their reply was "signing this agreement is a condition of your continued employment."
To make their request even more strange, I have only 3 weeks left on my contract with them and I have an offer from the company I have been working for directly (through the contract agency).
I do not plan to sign the agreement, as it was not what I originally agreed to and I do not like Arbitration Agreements as they tend to be only beneficial for the employer (who gets to choose the arbiter).
My concern is that if they decide to terminate me for not signing the agreement they are trying to force on me, is that this might cause problems with the offer from the company I am converting to a full-time employee of that I am current working for under the six month contract.
My guess, since IANAL, is that if they terminate me, I am absolved from all obligations under the contract since they would be breaking the contract. At that point, the full-time offer would be independent of the contract agency.
I have discussed parts of this with the company offering me a full-time position, and they have verified that they have no obligations to the contract agency past six months.
I have told the contract agency that I will need my attorney to review the documents before I could agree to anything in order to buy some time to make the best decision for me.
If I do sign it, nothing will probably ever come of it, but I do not like being bullied or giving away my rights unnecessarily.