When Must a Dispute Be Submitted to Arbitration? Who Makes the Call?, Part I

If you have a legal case but signed an agreement to resolve disputes through arbitration, it’s possible to challenge that agreement in court. The Federal Arbitration Act allows for some exceptions to enforceability, so not all arbitration agreements will be upheld by the courts. The decision on whether the agreement is enforceable will be made by either a court or an arbitrator, depending on the specific circumstances of the case. The Arbitration Act says that if there’s any question about whether something can be settled through arbitration, the law says to go with arbitration. This is because the law supports arbitration agreements just like any other contracts. However, there are still some reasons why an arbitration agreement might not be enforced, like if it’s unfair or if there’s fraud involved. But in general, arbitration agreements should be treated the same as any other contract. One example is a case where a state law about how arbitration agreements should be written was overruled by the federal Arbitration Act. So, even if the agreement didn’t meet the state law requirements, it still had to be enforced because of the federal law. In Florida, a contract can be considered procedurally unconscionable if it was not entered into fairly, if one party had more power than the other, if the terms were presented as “take-it-or-leave-it,” or if the weaker party did not understand the terms. For example, a nursing home agreement was found to be procedurally unconscionable when the person signing for the resident was not given enough time to review the document and the arbitration provision was hidden and not pointed out. In another case, a contract was found to be procedurally unconscionable when the weaker party only spoke Spanish and the contract was in English. In some court cases about nursing home contracts, it was found that arbitration agreements could be unfair and not enforced if they were too one-sided. This could happen if the agreement didn’t fully explain the bad parts of arbitration for the nursing home resident. It was also found that the agreement couldn’t take away the resident’s rights to things like punitive damages or other legal remedies. But in one case, the court said that even if a person didn’t read the agreement, they still had to follow it. Overall, arbitration agreements can be denied if they are really unfair and don’t give both sides a fair deal. The courts have ruled that arbitration agreements must be fair and allow people to get the full relief they’re entitled to under the law. They’ve also said that just because arbitration might be expensive doesn’t mean you can avoid it. Lastly, the Supreme Court said that a waiver in an arbitration agreement of the right to pursue a class remedy was enforceable, even if bringing individual arbitrations is expensive. In some cases, courts look at the rules for getting information (discovery) when deciding if an arbitration agreement is enforceable. The Supreme Court said that even though arbitration may not have as many discovery procedures as court, it’s still a fair trade because it’s simpler and faster.

In a case where an employee and employer had an arbitration agreement, the court found that the agreement was unfair because it limited the employee’s ability to get information to support their claim.

It’s important to remember that the duty to go to arbitration is based on what’s in the contract. You can’t be forced to go to arbitration for a dispute that isn’t covered by the contract. For example, in a case where someone died from carbon monoxide in their home, the court decided that the arbitration agreement didn’t apply because it only covered issues related to the contract, not a wrongful death claim. In a court case, it was determined that a contract requiring arbitration for disputes was not applicable to a specific disagreement because the language did not cover all parts of the agreement. In another case, a court found that arbitration was not required because both parties did not have equal obligations to arbitrate disputes. However, in a different case, it was ruled that both parties must have equal obligations to arbitrate for the agreement to be enforceable. In some cases, arbitration agreements can be unenforceable if they allow one party to change the rules at any time. Other agreements may be considered void because they limit the remedies available under the law. However, not all arbitration agreements violate public policy, as some limitations may not be against the law. Simply put, the Federal Arbitration Act (FAA) doesn’t cover all agreements to arbitrate. It excludes contracts of employment for seamen, railroad employees, and certain other workers engaged in foreign or interstate commerce. However, the Supreme Court has ruled that arbitration agreements in employment contracts are still enforceable under the FAA. When deciding which court to file a case related to an arbitration agreement, it’s important to remember that the FAA alone doesn’t give federal courts the authority to hear these types of cases – there needs to be another reason, like diversity of the parties or the presence of a federal question. Simply put, when a contract has an arbitration clause, there is a presumption that any disputes will be resolved through arbitration. This means that unless it’s absolutely clear that the arbitration clause doesn’t cover the issue, the dispute should be resolved through arbitration. However, there are certain situations where arbitration agreements may not be enforced, such as if they are unfair or unconscionable. These are determined based on the specific details of the agreement. These are citations to legal cases and statutes in Florida, as well as some commentary from a lawyer. The lawyer has a lot of experience in labor and employment law and now works as a mediator and arbitrator. The citations are from various court cases and statutes related to labor and employment law.

Source: https://www.floridabar.org/the-florida-bar-journal/when-must-a-dispute-be-submitted-to-arbitration-who-makes-the-call-part-i/