Arbitration in the United States

Arbitration, in the context of the law of the United States, is a form of alternative dispute resolution. Specifically, arbitration is an alternative to litigation through which the parties to a dispute agree to submit their respective evidence and legal arguments to a third party (the arbitrator(s) or arbiter(s)) for resolution. In practice, arbitration is generally used as a substitute for litigation. In some contexts, an arbitrator has been described as an umpire.^[1]

Arbitration in the United States' most overarching clause is the Federal Arbitration Act (officially the United States Arbitration Act of 1925, commonly referred to as the FAA). The Act stipulates that arbitration in a majority of instances is legal when both parties, either after or prior to the arising of a dispute, agree to the arbitration. The Supreme Court has taken a pro-arbitration stance across most but not all cases, although the federal government, most recently in 2022, has passed certain exemptions to arbitration agreements.^[2] States are also generally prohibited from passing their own laws which the Supreme Court and other federal courts believe limit or discriminate against arbitration.

The practice of arbitration, especially "forced" arbitration clauses between workers/consumers and large companies or organizations, has been gaining a growing amount of scrutiny from both the general public and trial lawyers. Arbitration clauses face various challenges to enforcement, and clauses are unenforceable in the United States when a dispute which falls under the scope of an arbitration clause pertains to sexual harassment or assault.