Forcing Arbitration: What is “Arbitrability” and Who Decides?

Under the modern interpretation of the Federal Arbitration Act (FAA), companies routinely use forced arbitration clauses to hide employees’ claims of discrimination, retaliation, wage theft, and other violations at work from public view. In forced arbitration proceedings, claims of employer wrongdoing may be decided in closed-door proceedings by company-paid arbitrators using rules promulgated by the employer. Increasingly, employees who object to this rigged system find their employers have included a “delegation provision” into their forced arbitration clauses, which consign those complaints to arbitration as well.

Having the power to hide most employment disputes in arbitration is a relatively recent jurisprudential win for employers. The U.S. Supreme Court used to reject the idea that most complex claims, like employment disputes, even were “arbitrable,” or that they could be fairly decided in a private arbitral forum. In assessing the “arbitrability” of a claim, courts used to consider whether it was proper for a dispute to be heard by an arbitrator who was empowered to enforce the contract between the parties but lacked the power to enforce the law. Courts would assess the ability for arbitrators, under the terms of the agreement, to render a full and fair hearing in the matters before them. They could also consider the impact forcing arbitration might have on public policy, such as whether it would be appropriate to enforce an arbitration clause in a contract of adhesion disseminated by a party with substantially more bargaining power. In determining whether a claim is “arbitrable” today, the Court limits its scrutiny to only whether parties “agreed to arbitrate,”  and it sees no problem with finding such an agreement is present even in preprinted contracts of adhesion presented to vulnerable employees and consumers on a take-it-or-leave-it basis.

Additionally, within the last decade, the U.S. Supreme Court has substantially weakened the ability for plaintiffs to fight the enforcement of ill-gotten arbitration provisions by sanctioning the use of delegation provisions. These clauses, which are usually found within the arbitration provision itself, typically provide that any dispute as to the arbitrability of a complaint should be decided by an arbitrator, not a court. Delegation provisions have not only disempowered courts from ruling on the question of arbitrability, they have increasingly empowered for-profit arbitrators to decide whether they, themselves, have the power to hear and rule on a person’s claims.

Starting in 1953, this timeline carries readers to present-day, reviewing along the way the question of what arbitrability is, who decides whether a matter is arbitrable, and how the U.S. Supreme Court’s view on this issue has evolved over time. Click on any moment in the timeline to read the case history.


1953

The Court holds that some claims may be non-arbitrable due to their complexity, the need for in-depth factfinding, or as a matter of public policy.

1963

The Court rules that where a party alleges both a contract and its arbitration clause were obtained by fraud, the question of the arbitration clause’s enforceability is for a court to decide.

1967

In promulgating the “severability doctrine,” the Court changes the standard for assessing the enforceability of an arbitration clause.

1972

The Court observes that the right to a particular court’s jurisdiction and other procedural protections are waivable via a valid forum-selection clause.

1974

Finding that employees’ substantive civil employment rights exist independently of their contractual rights, the Court holds that employees are entitled to judicial review of Title VII claims, and are not limited to decisions rendered by arbitrators.

1981

The Court holds that statutory claims, such as those arising out of the Federal Labor Standards Act, are not barred from going to court by prior submission to contractual dispute resolution procedures like arbitration.

1983

The Court declares that the Federal Arbitration Act created a “body of federal substantive law” such that “any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration.”

1985

The Supreme Court pronounces that courts must order arbitration whenever a valid arbitration clause is present, even in cases involving related non-arbitrable claims, state law claims, or where doing so would lead to inefficiency in the proceedings.

1985

To support its new position that parties can be compelled to arbitrate nearly all disputes, regardless of whether the claims are contractual or statutory in nature, the Court promulgates the “effective vindication doctrine.”

1987

Hollowing out its precedent from 1953, the Court reaffirms its broadest interpretations of the FAA.

1995

The Court narrows the inquiry as to whether a matter is arbitrable to the sole question of whether the parties “agreed” to submit to arbitration.

2003

A plurality holds that the question of whether class or collective claims can proceed in arbitration can be determined by an arbitrator.

2006

The Court reaffirms that a challenge to the validity of the contract as a whole, but that fails to specifically challenge the arbitration clause, must be ordered into arbitration.

2010

Revisiting its 2003 opinion, the Court holds that class arbitration is not permissible under an arbitration clause that is silent on the issue.

2010

As with arbitration clauses generally, the Court requires parties to challenge delegation provisions with specificity in order to render them unenforceable.

2018

The Court grants certiorari in three arbitration cases, and are expected to issue their opinions no later than June 2019.

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