The  clause is for binding arbitration and requires you to go  to an  arbitrator or arbitration board and allow them to settle  all disputes.  

Arbitration,  if you are not familiar with it, is like  going  to court.  Instead of a Judge you hire an arbitrator or a  panel  of arbitrators. They hear the evidence, listen to the witnesses, and decide your fate.

You  present  your case just as if you were going to  court.  The evidence rules are less stringent but there are  deadlines--dates that have to be met for evidence or witnesses to be allowed.  You have  to argue your case and summarize it based on the  evidence.

Once  the arbitrator rules and writes his decree you  are  stuck. You  can't  go to court, sue, or be heard by a panel  of  jurors.

Even  the EEOC is against arbitration clauses for  employees  and suggests  mediation rather that arbitration.

If  your company has an arbitration clause, it should be  clearly disclosed and give you time to seek legal advise before  signing. However,  even  after  you sign, you have seven to  ten  days  to change your mind.

If your company has a mediation clause, you are fortunate because mediation  is  voluntary, confidential, effective, and  cost  and time  efficient. Mediation is informal and no rules  of  evidence apply.

In  fact the mediator is really a facilitator who will  help  you and  the  other party find a middle ground where  you  both  win.

Mediation:

• Gives  you  the control to settle your own disputes  directly.  
• Is only binding if you reach and sign an agreement.
• Settles almost 90% of the cases during the mediation process.

If no agreement is reached by mediation, you can go to court.

A mediator does not have to be a lawyer, but he does need  training  in mediation. To be a good and effective mediator, one  must remain  totally neutral. In fact the Texas State Bar ethics  rule #11  and the law says, "A mediator cannot give any legal or  professional advice during mediation and must advise the parties  to seek professional advice from whomever".