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Who Regulates Arbitration?

49 Pages Posted: 31 Jul 2017 Last revised: 29 Nov 2017

David L. Noll

Rutgers Law School

Date Written: August 22, 2017


In recent years, a new front has opened in the United States’ “arbitration wars.” Since 2014, the Consumer Financial Protection Bureau, National Labor Relations Board, Centers for Medicare and Medicaid Services, and Departments of Defense, Labor, and Education have acted under statutes they administer to regulate the use of arbitration in specific domains. In each case, business groups challenged the agency’s action on the ground that the agency lacked authority to regulate arbitration. Some courts rejected those challenges, but many others found agency regulation barred by the Federal Arbitration Act (FAA) and the “liberal federal policy favoring arbitration agreements” it reflects.

The explosion of court/agency conflicts over agency arbitration regulation raises questions of history and doctrine. The FAA was enacted in 1925 and many of the regulatory statutes agencies invoke to regulate arbitration are nearly as old. Yet it is only recently that conflicts over agency arbitration regulation have appeared. What precipitated the recent explosion of court/agency conflicts over agencies’ authority to regulate arbitration? And what authority do agencies actually possess to regulate arbitration under statutes other than the FAA?

This Article reveals the origins of current court/agency clashes over arbitration in Supreme Court decisions from the mid-1980s. In doing so, the Article demonstrates that those conflicts are best resolved through a canon of statutory interpretation—the “arbitration authority” canon—that allocates regulatory authority between courts and agencies on the basis of congressional preferences reflected in law. The arbitration authority canon recognizes agencies’ authority to regulate arbitration under substantive regulatory statutes, but only when a use of arbitration violates a right an agency enforces or impacts a statutory policy an agency is expressly charged with implementing. In contrast to the ad hoc approach to agency authority that has prevailed in lower courts, the canon captures all of the statutory policies relevant to debates over agency arbitration regulation. It has implications for a number of current disputes, among them the first dispute over agency arbitration regulation to reach the U.S. Supreme Court, which will be argued next term.

Keywords: arbitration, Federal Arbitration Act, CFPB, Murphy Oil, Fiduciary Rule, Borrower Defense Rule, Long-Term Care Rule

JEL Classification: K12, K31, K40, K41, K42

Suggested Citation

Noll, David L., Who Regulates Arbitration? (August 22, 2017). Available at SSRN:

David Noll (Contact Author)

Rutgers Law School ( email )

United States

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