Mandatory Arbitration
Application of the Federal Arbitration Act
Under a growing number of consumer and employment agreements, companies are requiring disputes to be resolved through arbitration, a method of dispute resolution involving a neutral, private third party, rather than a judicial proceeding. In 2015, for example, the Consumer Financial Protection Bureau (CFPB) found that tens of millions of consumers use consumer financial products that are subject to arbitration clauses. In nonunion workplaces, it is estimated that at least a quarter of all employees are now subject to mandatory arbitration agreements. While arbitration is often viewed as a faster and less expensive alternative to litigation, consumer advocates and others…
