The Supreme Court has crafted unprecedented rules to govern contracts to arbitrate under the Federal Arbitration Act (FAA). Although Congress in enacting the FAA prescribed a rule of contract enforcement, it preserved state law defenses to enforcement, state regulation of contract formation, and interpretation issues that did not frustrate the enforcement mandate. This Article shows how the Court has created separate federal rules of formation, interpretation, and defense under the enforcement umbrella. It argues that because states have statutorily embraced the FAA’s enforcement mandate, there is no need for separate federal rules of formation, interpretation, or defense. This Article also demonstrates that the new federal rules for arbitration contracts fail to accomplish their legal mandate of guaranteeing substantive remedies in the arbitral forum. This failure occurs in many cases because of the merger of commercial contract precedents with disharmonious labor arbitration precedents. Using the Court’s rules for vacatur of arbitration awards, and its rules governing labor contract enforcement, this Article provides concrete examples of lost substantive rights attributable to arbitration contract enforcement. To avoid substantive waivers, this Article proposes an interpretive model drawing from Title VII’s disparate impact jurisprudence that prevents substantive waivers, and defers to state laws that are practically consistent with the FAA’s prescription of enforcement.
Federal Arbitration Law and the Preservation of Legal Remedies
Volume 90, No. 2, Spring 2018