Forms of Contractual Arbitration
years before arbitration became enforceable,
corporations found that many assets and business
relationships were being destroyed through years of
expensive litigation. In their requests for a
simpler method, the U.S. Arbitration Act of 1925 was
passed by Congress. The subsequent Federal
Arbitration Act as it applies today was further
defined by the Supreme Court in the late 20th century
and preempts state arbitration laws.
Agreements to abide by arbitration are legally
binding and decisions found by arbitration are
generally final and binding. Certain disputes
may be excluded from arbitration by law.
Arbitration proceedings may be between individuals,
corporation or states. It may also be used between
parties in different countries and even can be used to
settle World Trade Organization disputes between
countries. The use of arbitration between
employees and employers is becoming common to resolve
disputes of defamation, discrimination and others.
Wage and other labor disputes are commonly resolved
through binding arbitration. Labor unions have
embraced the arbitration process for at least the last
100 years. Arbitration has been made a key facet of
federal labor policy by the Supreme Court.
Organizations such as Major League Baseball, the NBA
and others settle disputes with players through an
Arbitration over child custody and other family law
disputes can by ordered by some state courts.
Although not binding, the arbitration process is used
as a first step in resolving such disputes.