Defining Arbitration

Authors

• Jill I. Gross, Elisabeth Haub School of Law at Pace University

Abstract

The Federal Arbitration Act (FAA) does not define the term “arbitration,” the very process the one-hundred-year-old statute was enacted to promote. The absence of a definition has led to courts’ inconsistent and unpredictable application of the FAA’s regulatory benefits to agreements to resolve disputes in processes other than traditional, binding arbitration, such as appraisal, evaluation, and mediation. Additionally, with no clear definition as guidance, companies have inserted arbitration clauses into adhesive consumer and employment agreements that require “arbitration” of disputes but designate a process lacking hallmarks of due process. The Supreme Court even justified enforcing class action waivers in arbitration clauses on the grounds that, despite no statutory definition, class arbitration is not “arbitration” within the meaning of the FAA. As a result, parties entering into agreements cannot be certain that a particular process will be covered by the FAA’s protections and enforcement mechanisms.

This Article argues that Congress should add a precise definition of the process of “arbitration” to the FAA. Congress should define arbitration as a dispute resolution process agreed to by the parties that results in a binding and final determination after all parties have had notice and a meaningful opportunity to be heard by a neutral decision-maker. Adding this definition would: (1) prevent courts from overapplying the FAA to processes that do not meet the definition; (2) prevent courts from excluding processes that meet the definition of arbitration from the benefits of the FAA; (3) provide uniformity and predictability; (4) address forced arbitration fairness concerns; and (5) reaffirm the integrity of archetypal arbitration as a distinct and valued dispute resolution mechanism that provides a fundamentally fair process to disputants.

Disciplines

Civil Procedure | Contracts | Dispute Resolution and Arbitration | Law | Legislation

Recommended Citation

Jill I. Gross, Defining Arbitration, 27 Cardozo J. Conflict Resol. 257 (2025).
Available at: https://larc.cardozo.yu.edu/cjcr/vol27/iss2/4