Reforming the Federal Arbitration Act to Equalize the Adjudication Rights of Powerful and Weak Parties

Authors

Stephen A. Plass

Abstract

Providing an extensive historical overview of federal arbitration jurisprudence and the Federal Arbitration Act (FAA), this article argues that the Supreme Court has misinterpreted FAA provisions and goals, thereby drastically changing the law of labor arbitration to the detriment of American workers and consumers. Namely, original congressional policy goals (providing speedy, fair and informal alternatives to court adjudication) have been countermanded by the Supreme Court’s interpretation of arbitration law over the last 50 years. As a result, modern arbitration law sets up an imbalance of power between employers/merchants and workers/consumers who are forced into lengthy and expensive procedures before they can exercise their legal rights to sue. At the time the FAA was passed, arbitration relied on the concept of voluntary consent by both parties, but modern arbitration agreements are often not the result of voluntary consent but of a more powerful contracting party who controls the rules of the arbitration forum, thereby exerting pressure on a weaker party. Arguing against this interpretation, this article posits options available to reverse current arbitration rules, including lower court judicial defiance, legislative overrides, and the possibility of Supreme Court reversal. This article concludes by suggesting a proposal for a narrow legislative fix to the FAA that would include national standards for arbitration agreements and would define “arbitration” to avoid the current practices that conflict with fundamental arbitration attributes and goals.

Recommended Citation

Stephen A. Plass, Reforming the Federal Arbitration Act to Equalize the Adjudication Rights of Powerful and Weak Parties, 65 Cath. U. L. Rev. 79 (2016).
Available at: https://scholarship.law.edu/lawreview/vol65/iss1/8