Judicial Enforcement of Pre-Dispute Arbitration Agreements: Back to the Future
112 Pages Posted: 26 Jun 2007
Recent Supreme Court decisions have sent federal courts a strong signal to enforce mandatory employment arbitration agreements under the Federal Arbitration Act (FAA). Critics worry that individuals lose access to courts to vindicate their statutory employment rights, and are subjected to unfair rules and procedures in these private tribunals. We present original empirical research from 396 federal court decisions from 1954-2002 in which employees sought to avoid arbitration, and analyze rulings before Gilmer, after Gilmer and before Circuit City, and after Circuit City. Also, statistical analysis is provided for specific issues raised by employees. This evidence is then related to extensive research of pre-FAA court rulings, and debunks the myth that early courts were hostile to arbitration. The historical and statistical elements of our analysis moderate the claims of arbitration advocates and critics. Arbitration supporters would strengthen their case for this ADR method by recognizing that American courts have consistently supported the use of pre-dispute arbitration agreements since the early 1800s. Nevertheless, judicial support for arbitration has been tempered during the last two centuries by due process limitations. This finding addresses a major concern for arbitration critics, who perceive current courts as too permissive in enforcing one-sided arbitration agreements. Post-Gilmer and Circuit City courts have denied enforcement with surprising frequency, notwithstanding the Supreme Court's strong and clear message to avoid interfering with these arrangements. They are unintentionally re-creating many of the due process safeguards from 19th Century courts.
Keywords: Dispute resolution, ADR, judges, abritration, judicial review, common law
JEL Classification: K31, K41, J52, J53, J58, J71, J78
Suggested Citation: Suggested Citation