The US Supreme Court issued a ruling in Rent-A-Center West v. Jackson. The Supremes have found that an arbitrator should resolve issues regarding the enforceability of an arbitration agreement, and not the courts. See decision. This is an unfortunate decision. Simply based on policy grounds, arbitrators earn income by hearing arbitrations. So, they have ample incentive to find every arbitration agreement enforceable, regardless of the circumstancess of the agreement.
As the dissent points out, a challenge to the enforceability of the arbitration agreement under the facts in Rent-A-Center would be made by an arbitrator. Not said is the fact that many arbitrators are not lawyers. I cannot imagine how a non-lawyer would deal with issues regarding contract issues.
Arbitration agreements have become very common in the work place. Arbitrations have many pros and cons, but mostly cons where employees are concerned. As Workplace Prof points out, the Federal Arbitration Act, passed in the 1940’s, was never intended to apply to situations in which the arbitration agreement is not a true arms-length agreement. See post. The FAA is being applied to situations in which the parties do not have comparable bargaining power. See Workplace Prof’s description of a case in which bank customers alleged forgery of their signatures on a so-called agreement to arbitrate disputes with a bank. Yet, the federal court still applied the FAA and ordered the bank customers to arbitration.
It perverts contract law to force parties claiming fraud or forgery to subject themselves to a psuedo contract. It is equally perverse to pretend that employers and employees can negotiate in good faith an agreement to arbitrate employment disputes.