A Metamorphosis: How Forced Arbitration Arrived in the Workplace

Abstract

Over the past twenty years, there has been movement away from the public enforcement of statutory workplace rights in favor of a private system of forced arbitration of employment disputes. Forced arbitration — what in legal jargon is commonly referred to as “binding pre-dispute mandatory arbitration” or “employer-promulgated arbitration” — has its roots in the Federal Arbitration Act (“FAA”), a ninety-year-old statute passed by Congress in 1925. It was not until the U.S. Supreme Court’s 1991 watershed decision in Gilmer v. Interstate Johnson/Lane Corporation that the Court allowed statutory employment claims to be submitted to arbitration under the FAA. Forced arbitration was transformed from a rarely used form of dispute resolution into a juggernaut that has changed the nature of statutory enforcement of worker protection laws in the United States.The shift from public enforcement of workplace laws to private forced arbitration has been characterized by a number of trends. This Article examines some of them. Part I sets the stage by providing a brief overview of the distinctions between voluntary arbitration and forced arbitration. Part II describes the elevation of the FAA to a “super-statute” and the limited scope of judicial review of forced arbitration provisions and awards. Part III discusses how the courts have misapplied traditional labor law jurisprudence to justify the expansion of forced arbitration of employment disputes under the FAA. Finally, Part IV explores how forced arbitration has eroded the statutory purposes and protections of our nation’s workplace laws, focusing on the Fair Labor Standards Act (“FLSA”) and Title VII of the Civil Rights Act of 1964 (“Title VII”). These developments have transformed the employee-employer relationship from one that is regulated by worker protection statutes enforced in our public justice system to one that operates in private tribunals where workers are forced to arbitrate their claims as a condition of employment and without due process guarantees.