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Understanding the Arbitration Fairness Act

Monday, June, 20, 2011

The Arbitration Fairness Act is not yet a law, but it has been introduced into Congress in several different sessions in an attempt to get it passed so that it can go to the president for signature.  The most recent attempt to pass it is underway in the current Congressional session, mainly because the US Supreme Court handed down a ruling many consumer groups feel unfairly weights arbitration cases in favor of corporations. 

Arbitration Fairness Act to Affect Employment Disputes


Employment arbitration is often the result of forced arbitration clauses that workers must agree to in order to be hired.  The proposed Arbitration Fairness Act would prohibit such clauses in several situations including employment disputes.  One concern of the act is the belief that forcing a job seeker to agree to arbitration in order to secure employment is a form of undue pressure that should therefore make the arbitration clause unenforceable.


Employers obviously prefer these sorts of clauses to remain valid since it provides them with a near-foolproof liability shield.  Even when employers allegedly violate an employee's civil rights, as in the case of two Hooters waitresses recently, the employer need not face a lawsuit but only an arbitration panel.


On a society-wide basis, arbitration may be preferable because it represents a more streamlined use of scarce resources.  Arbitration typically costs less and proceeds faster than a lawsuit would be able to.

Learn more about Arbitration or find an Arbitration Attorney in the National Arbitration Directory.