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Arbitration Lesson #4 - History part 2
July 11, 2006 by Ross Runkel at LawMemo

In the unionized sector, it's the unions that really love arbitration. In the non-union sector, it is the employers who seek individual arbitration agreements.

Employees, organized labor, and pro-employee groups typically oppose pre-dispute agreements to arbitrate, especially when they are required by an employer as a condition of employment.

Employment litigation has changed a lot in 40 years.

Congress enacted a series of employment discrimination statutes (Equal Pay Act, Title VII, ADEA, ADA) and other employment statutes such as the Family and Medical Leave Act. In 1991 Congress allowed for jury trials in Title VII cases, and expanded available remedies to include compensatory damages and punitive damages.

State courts have become more hospitable to employee claims such as wrongful discharge, and many courts have turned the legal notion of "at-will employment" into little more than a slogan.

Employers worried about the increase in employment litigation, the risk of large jury verdicts, and the related unfavorable publicity. One response was requiring non-union employees to sign agreements that all future employment disputes would be resolved through arbitration.

A lot of the history had little or nothing to do with employees and employers. States began to adopt pro-arbitration statutes in the 1920s. In 1955 the National Conference of Commissioners on Uniform State Laws promulgated the Uniform Arbitration Act. Thirty-five jurisdictions have adopted the Uniform Act, and 14 have adopted substantially similar legislation. In 2000 the Commissioners put forth a Revised Uniform Arbitration Act that addresses a number of issues that arise in modern arbitrations.

In 1925 Congress enacted the Federal Arbitration Act (FAA), 9 U.S.C. §§ 1 et. seq., in response to the needs of commercial interests that were frustrated by the unwillingness of American courts to enforce their arbitration agreements. The basic purpose of the FAA was to put arbitration agreements on the same footing as other contracts. The application of the FAA to the employment arena will be covered in a later lesson.

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