Under the Federal Arbitration Act (9 U.S.C. s. 1) agreements to arbitrate "any controversy arising out of or in connection with compensation, employment or termination of employment" are enforceable. The statute exempts contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.
In Smith v. Spizzirri, 601 U.S. 427, 144 S.Ct. 1173 (2024), the Supreme Court ruled that when a district court finds that a lawsuit involves an arbitrable dispute and a party has requested a stay of the court proceeding pending arbitration, Section 3 of the Act compels the court to issue a stay, and the court lacks discretion to dismiss the suit.
In Bissonnette v. LePage Bakeries Park Street, LLC, 601 U.S. 246, 144 S.Ct. 905 (2024), the Supreme Court ruled that a transportation worker need not work for a company in the transportation industry in order to be exempt under this statute.
These agreements to arbitrate are also enforceable against statutory claims, e.g., claims under Title VII for race discrimination, claims under the ADA for handicap/disability discrimination and claims under the ADEA for age discrimination. Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001)
In Air-Con, Inc. v. Daiken Applied Latin America, LLC, 21 F.4th 168 (1st Cir. 2021), the First Circuit Court of Appeals issued a decision ruling that courts must treat arbitration as a matter of contract and enforce agreements to arbitrate according to their terms. The party seeking to compel arbitration bears the burden of demonstrating that a valid agreement to arbitrate exists, that the movant is entitled to envoke the arbitration clause, and that the other party is bound by the clause. If the non-moving party puts forward materials that create a genuine issue of fact about the dispute's arbitrability, the court shall proceed summarily to trial to resolve that question. However, the non-moving party cannot avoid compelled arbitration by generally denying the facts upon which the right to arbitration rests; the party must identify specific evidence in the record demonstrating a material factual dispute for trial.
In Bosse v. New York Life Insurance Co., et al., 992 F.3d 20 (1st Cir. 2021), the First Circuit Court of Appeals issued a decision upholding the enforceability of an arbitration agreement that delegates the arbitrability of claims issues to an arbitrator, and not to a court.
In Campbell v. Gen. Dynamics Gov. Sys. Corp, , 407 F.3d 546, 555 (1st Cir. 2005), the First Circuit Court of Appeals held that the appropriateness of enforcing an agreement to arbitrate a Federal employment discrimination claim hinges on whether, under the totality of the circumstances, the employer's communications to its employees afforded some minimal level of notice sufficient to apprise those employees that continued employment would effect a waiver of the right to pursue the claim in a judicial forum.
Arbitration awards can be vacated only if:
The arbitration award was procured by corruption, fraud or undue means;
There was evident partiality or corruption in the arbitrator;
The arbitrator was guilty of misconduct by which the rights of a party were prejudiced; or
The arbitrator exceeded his powers or so imperfectly executed them that a mutual, final and definite award was not made. (9 U.S.C. s. 10(a))
Under a new Federal law entitled Ending Forced Arbitration Act (EFAA) amending the Federal Arbitration Act, as of March 3, 2022, any person alleging sexual harassment or sexual abuse can invalidate any predispute arbitration agreement or class/collective action waiver that otherwise would require the claim to be arbitrated. Agreements to arbitrate sexual harassment or sexual abuse claims made after such claims have arisen remain enforceable and cannot be invalidated. (9 U.S.C. s. 401)
Courts, not arbitrators, decide if this Act is applicable.