The law clearly backs the enforceability of employment arbitration agreements, but it is the employer’s responsibility to ensure that its arbitration program provides due process safeguards and is fundamentally fair.
The use of arbitration to resolve nonunion employment disputes has a solid legal basis under the Federal Arbitration Act (FAA).The FAA, passed in 1925, legitimizes arbitration clauses in interstate contracts. It puts arbitration agreements firmly on the same footing as other types of contracts and allows parties to arbitrate their case instead of going to court, so long as they have an agreement to arbitrate and the arbitration proceeding is fundamentally fair. The FAA, which has a broad reach, covers all employment contracts except for certain transportation employees, such as seamen and railroad workers.
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