Arbitration Law in a Nutshell
Chapter 1. Terms and Concepts
1. Arbitration Agreements
A contract to arbitrate disputes can take one of two forms: a submission or an arbitral
clause. The submission is an arbitration agreement in which the parties agree to submit an existing
dispute to arbitration. The arbitral clause is a contract under which the parties agree to submit
future disputes to arbitration. An agreement to arbitrate disputes must be in writing and should
satisfy the standard requirements of contract formation (e.g., offer, acceptance, ‘meeting of the
minds,’ consideration). The ‘emphatic federal policy favoring arbitration’ has made the
requirements for entering into an arbitration agreement more flexible. A contract to arbitrate can
be implied from an exchange of commercial documents. Depending on the circumstances, an email
or even alleged conversations between the parties could create an agreement to arbitrate. The
presumption favoring arbitration and arbitrability has made the vast majority of contracts for
arbitration impervious to challenge.
The arbitral clause is the more commonplace arbitration agreement. Generally, it states the
obligation to arbitrate in clear and straightforward language: “Any dispute arising under this
contract shall be submitted to arbitration under the rules of [a chosen arbitral institution].”
Ordinarily, the arbitral clause is a provision embedded in a larger contract; despite that
incorporation, legal doctrine provides that the agreement to arbitrate is a separate, self-standing
contract. The separability doctrine attributes an autonomous legal character to the arbitral clause
and thereby protects arbitral jurisdiction.
Once a dispute arises, the parties to an arbitral clause usually enter into a submission
agreement. The submission is the preliminary step in building an arbitral proceeding. It establishes
the disputes that need to be resolved. In so doing, it defines the arbitrators’ jurisdiction—their right
to rule. It also initiates the appointment of arbitrators. An enforceable agreement to arbitrate
deprives the courts of jurisdiction to entertain matters that the agreement covers. Judicial authority
to adjudicate remains in abeyance even when an arbitral award is vacated or difficulties arise in
the arbitral proceeding. As a matter of law, the arbitration agreement establishes that the designated
arbitrators have exclusive jurisdiction to decide submitted matters. Generally, only mutual party
rescission can void an agreement to arbitrate. Court assistance is available during the proceeding
when it is necessary to compel arbitration, nominate arbitrators, enforce demands for evidence, or
to legitimate or give effect to the award.
2. Separability and Kompetenz-Kompetenz
The separability doctrine makes the arbitral clause less vulnerable to attack; the flaws in
the main 11 contract cannot impair the agreement to arbitrate, unless they also exist in the
arbitration agreement. Kompetenz-kompetenz (jurisdiction to rule on jurisdictional challenges)
provides that the arbitral tribunal can rule on the legitimacy of its own jurisdiction. Arbitrators
have the legal right to decide whether the arbitration agreement exists, is a valid contract, and to
what matters it applies. The FAA does not refer to arbitrator authority to rule on jurisdictional
matters. Kompetenz-kompetenz emerged decades after the enactment of the statute. The Court
incorporated the doctrine into U.S. arbitration law through its decisional law. See First Options of
Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995). The separability doctrine also resulted from stare
1
Arbitration Law in a Nutshell
©2021 West Academic Publishing
Arbitration Law in a Nutshell
Chapter 1. Terms and Concepts
decisis. See Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967); Buckeye Check
Cashing, Inc. v. Cardegna, 546 U.S. 440 (2006).
The separability and kompetenz-kompetenz doctrines reinforce the independence of the
arbitral process. Court supervision of the arbitrator’s determination of jurisdictional issues is likely
to be highly tolerant. The law requires these determinations to be subject to deferential judicial
review. Moreover, as in most hospitable jurisdictions to arbitration, judicial scrutiny of arbitrator
determinations on jurisdiction is delayed until the rendition of the final award. The final award
combines the ruling on the merits with any jurisdictional determinations. The joinder of the two
types of rulings was intended to reduce the likelihood of a judicial reversal of either determination.
See First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995). For all intents and purposes,
then, the arbitral tribunal conclusively decides any question pertaining to the validity and scope of
its own adjudicatory authority. Unlike court decisions on jurisdiction, arbitrator awards on
jurisdiction are not subject to de novo review.
3. Arbitrability
Arbitrability establishes which disputes can be submitted to arbitration as a matter of law.
Inarbitrability can prevent the enforcement of an arbitration agreement or an arbitral award.
Inarbitrability thereby limits the parties’ right to engage in arbitration and the designated
arbitrators’ right to rule. Inarbitrability can arise as a result of the subject matter of the dispute or
because of contractual flaws in the arbitration agreement. Under subject-matter inarbitrability, a
dispute on matters directly linked to the public interest cannot be submitted to arbitration. Matters
of criminal culpability, for example, are deemed inarbitrable because courts have exclusive
jurisdiction over Bill-of-Rights litigation. Therefore, unless plea-bargaining is considered a form
of arbitration (a dubious proposition at best), allegations of bribery, criminal violations of RICO,
or fraud in matters of tax liability are inarbitrable because these disputes involve the public
interest—even though the alleged misconduct may result from private commercial conduct. To
some extent, subject-matter inarbitrability overlaps with the public policy exception to the
enforcement of arbitral agreements and awards. In each, public interest considerations prevent the
recourse to arbitration or extinguish the outcome it reaches.
More difficult problems of subject-matter inarbitrability arise when disputes involve the
government regulation of commercial activity through, for example, antitrust or securities statutes.
The difficulty can become acute in domestic litigation or in the context of international business
transactions. Statutory claims raise matters pertaining to the authority of the government to
implement regulatory policy, the individual parties’ freedom of contract, whether the transactions
are ‘one-off’ (single-time) transactions or have a larger presence in the marketplace, and whether
arbitrators have sufficient integrity—as well as the necessary jurisdiction, independence, distance,
and competence—to rule on matters of regulatory law.
The U.S. Supreme Court has expressly rejected the traditional view that statutory disputes
are inarbitrable. See Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 632
(1985) (“The mere appearance of an antitrust dispute does not alone warrant invalidation of the
selected forum on the undemonstrated assumption that the arbitration clause is tainted.”). The
federal judicial position is that regulatory claims, regardless of whether they arise under
international or domestic contracts, can be submitted to arbitration. See Gilmer v.
2
Arbitration Law in a Nutshell
©2021 West Academic Publishing
Arbitration Law in a Nutshell
Chapter 1. Terms and Concepts
Interstate/Johnson Lane Corp., 500 U.S. 20 (1991) (“. . . the ADEA is designed not only to address
individual grievances, but also to further important social policies. . . . We do not perceive any
inherent 14 inconsistency between these policies, however, and enforcing agreements to arbitrate
age discrimination claims. . . . The Sherman Act, the Securities Exchange Act of 1934, RICO, and
the Securities Act of 1933 all are designed to advance important public policies, but . . . claims
under those statutes are appropriate for arbitration.”).
Inarbitrability also functions on the basis of contract. In these circumstances, the
challenges to arbitrability converge on the contract of arbitration—its existence, making, and
scope. The allegation of inarbitrability can be based upon the lack of an agreement to arbitrate, a
contract deficiency in an agreement that does in fact exist, or the limited scope of an otherwise
existing and valid arbitration contract. Under some laws, a failure to follow the provisions of the
arbitration agreement in organizing the arbitration can lead to inarbitrability. Contract directives
are the gateway to arbitration. See First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995).
Without an actual, enforceable, and applicable agreement, there is no legal obligation to
arbitrate.
A few case law rules have a direct bearing upon the inarbitrability defense. First, courts
generally interpret a broadly-worded arbitration agreement as referring to all transactional disputes
that arise between the parties. Therefore, a broad reference to arbitration (“any dispute arising
under this contract”) encompasses—as a matter of law—contract problems relating to
performance, delivery, conformity to specifications, excuse, and the defenses to performance, as
well as statutory claims pertaining to the public regulation of commercial conduct (bankruptcy,
antitrust, securities, and possibly taxation). A broad reference to arbitration also encompasses civil
rights claims. Penn Plaza v. Pyett, 556 U.S. 247 (2009), however, indicates that specific mention
must be made of discrimination claims in the arbitration agreement. In some circumstances, the
reference to arbitration may include jurisdictional questions relating to the scope of the contract—
if the parties include an addendum to that effect in the arbitration agreement (a so-called Kaplan
jurisdictional delegation clause) that attributes authority to the arbitrators to interpret the arbitral
clause itself. It may, therefore, be necessary to exclude expressly matters that the parties do not
wish to submit to arbitration.
Second, state contract law generally governs the validity and construction of an arbitration
agreement. Therefore, questions pertaining to the formation of the contract and its validity—
adhesion, unconscionability, and other restrictions that protect consumer rights—are resolved
pursuant to the applicable state law. Because the U.S. law on arbitration has been federalized, any
state contract law provision that disables arbitration agreements is subject to challenge under the
preemption doctrine. To survive preemption, the statutory disability must apply to contracts in
general; it cannot be directed at arbitration agreements alone. Rulings that adhesive arbitration
agreements are unconscionable have been especially common in employment and consumer cases
in the state and federal courts in California. See, e.g., Chalk v. T-Mobile USA Inc., 560 F.3d 1087
(9th Cir. 2009). The Court’s recent ruling in AT & T Mobility v. Concepcion, 563 U.S. 333 (2011),
however, voided an entire line of California decisional law (the Discover Bank case et. al.) in
which the state courts invalidated arbitration agreements because they contained class action
waivers and, therefore, arguably compromised the legal rights of the weaker party to an adhesive
agreement. The Court held that, no matter how justifiable a state public policy might be, the
3
Arbitration Law in a Nutshell
©2021 West Academic Publishing
Arbitration Law in a Nutshell
Chapter 1. Terms and Concepts
California decisional law conflicted with the “fundamental objectives” of FAA § 2 and was
preempted by federal law. As a general rule, courts uphold arbitration agreements no matter their
would-be deficiencies.
Third, the U.S. Supreme Court has proclaimed that arbitral proceedings are a viable form
of adjudication. According to the Court, arbitration is as effective as court proceedings for the
protection of legal rights. Legal rights, therefore, are neither diminished nor destroyed by the
submission to arbitration. Moreover, each arbitration stands on its own and has no significance
beyond the private agreement and relationship that gave rise to it. Each arbitration is a stand-alone
and self-contained event. Finally, the unstated view in many of the U.S. Supreme Court’s rulings
is that arbitration is, as a matter of law, in the parties’ and society’s best interest. Some access to
justice is better than none at all. This position limits considerably contract inarbitrability. As long
as the parties refer to arbitration, they intend to arbitrate all disputes no matter what contract flaws
may exist. The presumption that arbitration is in the best interest of all the affected parties can
remedy flaws that might otherwise render the agreement unenforceable.
4. The Arbitral Process
Arbitration, however, is not a remedial panacea. In some—but certainly not all—instances,
arbitration provides a better, or even the best, dispute resolution protocol. It is one of several
adjudicatory possibilities available to parties. It should be chosen intelligently—i.e., only if it
effectively responds to the parties’ actual needs and promotes their goals. Like judicial litigation,
mediation, or party negotiations, arbitration has advantages and disadvantages. The use of the
remedy should be based on a calculation of gains and losses it brings with a view of achieving
maximum benefits for the parties. In every case, choosing between judicial litigation, arbitration,
or structured negotiation requires a clear understanding of the circumstances of the dispute and the
operation and characteristics of the available remedies.
Court proceedings are generally protracted and costly; appeal is available and discovery
can be complex, yet inconclusive. The courts are seen as guarantors of fairness and impartiality.
Due process in judicial litigation, however, is often more theoretical than real. Many judicial trials
end in a settlement that results from the parties’ need to manage their risk of loss. While arbitral
adjudication is not infallible, it provides sensible and effective justice. When an arbitral proceeding
results in a settlement, it is memorialized in an ‘award on agreed terms’. The latter is enforceable
as an award; it is not merely a contract. An award on agreed terms is final and binding and can be
coercively enforced by a court pursuant to the ‘emphatic federal policy favoring arbitration’. To
resolve intractable problems with a settlement, the parties must return to court.
Arbitral proceedings usually take place in accordance with the rules of an administering
arbitral institution, like the American Arbitration Association (AAA) or the International Chamber
of Commerce (ICC). The institutional rules organize the arbitral process into various stages: (1)
the constitution of the arbitral tribunal; (2) the establishment of the tribunal’s jurisdiction through
the terms of reference; (3) the selection of a procedural format for the hearings; (4) the trial phase
of the process; (5) the deliberations; and, finally, (6) the rendering of an award. Parties can also
customize their arbitration. Judicialization is always possible, but, ordinarily, the contracting
parties trust the arbitrators and the arbitral process to provide a fair result.
4
Arbitration Law in a Nutshell
©2021 West Academic Publishing
Arbitration Law in a Nutshell
Chapter 1. Terms and Concepts
Following receipt of a ‘demand for arbitration’ from the aggrieved party, the arbitral
administrator notifies the other party of the demand, delivers it, and requests that it file an answer.
The parties nominate arbitrators pursuant to their agreement or, in the event of an impasse, the
arbitral administrator or a court of law (in exceptional circumstances) names the arbitrators. The
arbitral administrator can assist the parties by providing arbitrator lists. Legal counsel can also
assist clients to choose arbitrators. The party-designated arbitrators name a neutral presiding
arbitrator. Despite their connection to one of the parties, party-appointed arbitrators are expected
to act in a generally disinterested manner.
How sufficient or workable arbitrator impartiality can be achieved is difficult to define.
Some courts believe that the presence of a neutral arbitrator is sufficient to guarantee the
impartiality of the adjudicatory proceeding and result. Moreover, they add, the arbitrating parties
are entitled to ‘their’ arbitrator on the tribunal so that they can have confidence that their positions
are heard and considered, especially during tribunal deliberations. Arbitral administrators,
however, believe that all arbitrators—even those who are party-appointed—should be as neutral
as the presiding arbitrator. The disclosure of potential conflicts of interest by both prospective and
sitting arbitrators furthers arbitrator transparency. Arbitrators may also develop conflicts during
the proceedings.
Arbitral administrators can appoint emergency or interim arbitrators to address matters
involving the preservation of assets and evidence prior to the constitution of the actual arbitral
tribunal. The failure of the arbitrators to disclose relevant information can result in the vacatur of
the award on the basis of partiality. Depending upon the specific circumstances, arbitrators can
refuse to serve on the arbitral panel or disqualify (recuse) themselves because of an existing or
potential conflict of interest or for personal reasons. The parties can also file a motion to disqualify
an arbitrator before the arbitral tribunal, the administering arbitral institution, or a court of law.
Such filings should remain within the arbitral process whenever possible. With the ‘acquiescence’
of the parties and under the ‘direction’ of the arbitral administrator, the arbitral tribunal chooses a
venue for holding the arbitration and sets a time for the initial hearing. At this stage of the process,
parties submit a deposit for arbitrator and administrative fees with the arbitral administrator.
An arbitration can be conducted solely on the basis of submitted documents. In an
‘arbitration on the documents’, the parties supply the arbitral administrator with a statement of
their positions and allegations, as well as the evidence in support of their claims. The arbitral
tribunal or the sole arbitrator then rules on the dispute on the basis of the submissions. Hearings
are not held. Arbitral trials can range from rulings on a written record to an abbreviated hearing
process to protracted proceedings that include pretrial discovery, testimonial evidence, and crossexamination. How arbitral hearings are conducted can be determined in the arbitration agreement
or result from the parties’ ability to reach a mutual agreement once a dispute arises. In the event
of disagreement, the arbitral tribunal—‘assisted’ by the arbitral administrator—establishes the
logistical protocol for the arbitral trial.
Once these preliminary matters are resolved, the hearings begin. The parties’ expectation
is to participate in a flexible and fair hearing process. The arbitrators generally establish and
supervise the arbitral procedure. They have sufficient authority to thwart trial tactics that
5
Arbitration Law in a Nutshell
©2021 West Academic Publishing
Arbitration Law in a Nutshell
Chapter 1. Terms and Concepts
unnecessarily lengthen the proceedings. As a rule, the parties want a sufficient opportunity to make
their case. Then, they want a final and binding ruling from the arbitral tribunal. Arbitration usually
does not include a right to pretrial discovery or to appeal on the merits. The parties can engage in
cooperative record-building by exchanging documents and witness lists prior to the
commencement of the hearing. The arbitral tribunal decides whether proffered evidence is relevant
and evaluates the significance of the admitted evidence. While the arbitrating parties have the right
to be heard, neither side can abuse their rights by manufacturing specious arguments, issues, and
requests for evidence—thereby tactically prolonging the proceeding for litigious advantage.
Arbitrators are generally intolerant of such conduct.
When the record is established, the parties present their closing arguments and final briefs.
The arbitral tribunal then closes the hearing and adjourns to deliberate. The tribunal’s deliberations
are private; only the arbitrators are present. As noted earlier, the expectation is that partydesignated arbitrators will highlight the various points in their appointing party’s case. It is
important to arbitrating parties to have a sense that their position is being considered at this stage
of the process. A decision can be, and usually is, reached by simple majority vote.
Especially in domestic arbitral practice, tribunals are unlikely to provide reasons with
rendered awards; reasons are meant to explain how the arbitrators reached their determination.
Awards usually follow a standard format: A statement of the facts, a description of the issues, the
parties’ respective positions, and a disposition of the matters submitted. The practice of not
providing an opinion with domestic awards is intended to discourage the possibility of a judicial
review of the merits, especially of the arbitrators’ application of law. The practice, however, is no
longer as pervasive as it once was. Arbitrators are more confident that courts will defer to them
and limit their scrutiny to how the arbitrators conducted the proceedings. They also realize that an
explanation can create greater party acceptance of the result and the process that gave rise to it.
Arbitration statutes should consider integrating ‘privileged reasons’ into their regulation of arbitral
awards. The practice arose in English maritime arbitration and involves the arbitral tribunal’s
communication of its assessments of the case to each party—‘off the record’. The practice wards
off judicial merits reviews while explaining the reasons for the results to the parties.
5. The Case Groupings
Four sets of case trilogies represent the pillars of U.S. arbitration law. The first, the
Steelworkers Trilogy, announced in 1960, established that arbitration had a fundamental role to
play in the resolution of labor and management disputes in the unionized workplace. See United
Steelworkers of Am. 23v. American Mfg. Co., 363 U.S. 564 (1960); United Steelworkers of Am.
v. Warrior & Gulf Navigation Co., 363 U.S. 574 (1960); and United Steelworkers of Am. v.
Enterprise Wheel & Car Corp., 363 U.S. 593 (1960). The labor arbitration cases articulated the
basic legal principles that would come to govern most of the other forms of arbitration. The
doctrines developed in labor arbitration eventually were incorporated into the FAA. In Granite
Rock Co. v. Int’l Bro. of Teamsters, 561 U.S. 287 (2010), the Court recognized, in fact, that a set
of unitary legal principles regulated arbitration no matter the area in which it was applied and the
disputes it addressed.
6
Arbitration Law in a Nutshell
©2021 West Academic Publishing
Arbitration Law in a Nutshell
Chapter 1. Terms and Concepts
The second trilogy, the ‘Federalism’ Trilogy, came a number of years after The
Steelworkers Trilogy. It made clear that the FAA was the controlling statute in matters of
arbitration. Conflicting state law provisions could not undo the FAA’s jurisdictional hold over
arbitration. See Moses H. Cone Mem. Hosp. v. Mercury Constr. Co., 460 U.S. 1 (1983); Southland
Corp. v. Keating, 465 U.S. 1 (1984); Dean Witter Reynolds v. Byrd, 470 U.S. 213 (1985). The
FAA, especially Sections Two and Ten which respectively legitimated arbitration agreements and
awards, applied to all transactions that had an arguable connection to interstate commerce. The
Commerce Clause and the Supremacy Clause of the U.S. Constitution combined to guarantee the
federal power over arbitration. The command of the FAA reached federal courts sitting in state
law cases, state legislation that might directly or incidentally affect arbitration, and state court
rulings in ordinary contract cases. In effect, the federalization of U.S. arbitration law led to the
creation of a federal right to arbitrate that had a clear but ill-defined constitutional standing. The
first Federalism Trilogy was eventually affirmed by a second group of cases on federalization.
They eliminated any doubts about federalization that may have been created by Volt Information
Sciences v. Stanford University, 489 U.S. 468 (1989). See Allied-Bruce Terminix Cos., Inc. v.
Dobson, 513 U.S. 265 (1995); Doctor’s Associates, Inc. v. Casarotto, 517 U.S. 681 (1996);
Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (2006); Preston v. Ferrer, 552 U.S. 346
(2008); AT & T Mobility v. Concepcion, 563 U.S. 333 (2011).
In the Court’s assessment, a single, uniform framework of substantive legal rules was vital
to the status and operation of arbitration. Uniformity created effective legal regulation. A
multiplicity of views, disagreement, and the exercise of discretion would render the necessary
unity of approach impossible to achieve. The federal right to arbitrate eclipsed the political
authority of states and the independent jurisdiction of state courts. In effect, the FAA represented
a statement of national policy on arbitration. Acquiescing to states’ rights in this area would have
brought about a nationwide denial of due process. Tolerating exceptions—large or small—would
have robbed arbitration of its universal reach. See, e.g., Buckeye Check Cashing, Inc. v. Cardegna,
546 U.S. 440 (2006).
A third trilogy of cases addressed the authority of arbitrators to resolve issues that arose at
the head of the arbitral process, including their ability to decide 25 challenges to their own
jurisdictional authority. The case law created two regimes: first, a contractual framework in which
the parties could agree (“clearly and unmistakably”) to confer authority on the arbitrators to decide
jurisdictional challenges. Then, a common law framework under which arbitrators acquired the
right to decide matters of procedural arbitrability arising from the parties’ conduct (e.g., a waiver
of the right to arbitrate arising from participation in a judicial action), as well as the power to
construe the content of the arbitral clause itself. See First Options of Chicago, Inc., v. Kaplan, 514
U.S. 938 (1995); Howsam v. Dean Witter Reynolds, Inc., 573 U.S. 79 (2002); Green Tree Fin.
Corp. v. Bazzle, 539 U.S. 444 (2003). The enhanced threshold authority of the arbitrator was, to
some extent, destabilized by the holding in Stolt-Nielsen v. AnimalFeeds Int’l, 559 U.S. 662
(2010), in which the Court ruled that, in construing an arbitral clause, arbitrators could not reach
conclusions that imposed the arbitrators’ personal views of the bargain and public policy upon the
arbitrating parties. The arbitrators’ interpretation of the arbitral clause could not incorporate ‘alien’
content into the arbitration agreement. See Rent-A-Center v. Jackson, 561 U.S. 63 (2010). The
Court placed other limitations on the arbitrators’ authority to exercise their jurisdictional and
interpretive authority. In Rent-A-Center v. Jackson, the Court held that the arbitrators’ right to rule
7
Arbitration Law in a Nutshell
©2021 West Academic Publishing
Arbitration Law in a Nutshell
Chapter 1. Terms and Concepts
on jurisdiction must be validated by a court of law. Finally, in BG Group PLC v. Republic of
Argentina, 572 U.S. 25 (2014), the Court attributed enormous decisional authority to arbitrators
by holding that, in reviewing an award pertaining to a World Bank (or ICSID) arbitration,
arbitrators could alter the provisions of an international treaty in deciding the parties’ dispute.
Lastly, a fourth trilogy consisted of a group of cases on international litigation. See The
Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972); Scherk v. Alberto-Culver Co., 417 U.S. 506,
reh’g denied, 419 U.S. 885 (1974); Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473
U.S. 614 (1985). The need to have recourse to arbitration is even more pressing in international
commerce. Without a viable system of international arbitration, transborder commerce could not
take place. International merchants and transactions would be overwhelmed by risk if there were
no process for imposing contract accountability. The judicial enforcement of arbitral agreements
and awards across national boundaries was a vital source of stability for international commercial
transactions.
Some of the international decisions played a decisive role in crafting the general domestic
doctrine on arbitration. They gave rise to another string of cases on subject-matter or statutory
arbitrability. For example, the ruling in Mitsubishi, part of the international litigation trilogy, gave
rise to the holdings in Shearson/Am. Express, Inc. v. McMahon, 482 U.S. 220 (1987), and
Rodriguez de Quijas v. Shearson/Am. Express, Inc., 490 U.S. 477 (1989). These two cases
eventually led to the creation of the securities arbitration industry. Gilmer v. Interstate/Johnson
Lane Corp., 500 U.S. 20 (1991), integrated the principles of the Steelworkers Trilogy into the
nonunionized workplace, thereby posing a substantial challenge to the rule of Alexander v.
Gardner-Denver, 415 U.S. 36 (1974), as well as generating the field of employment arbitration. In
fact, in 14 Penn Plaza v. Pyett, 556 U.S. 247 (2009), the Court integrated the Gilmer arbitrability
rule into CBA arbitration and reduced the status of Gardner-Denver to a “narrow holding,” the
application of which it described as limited.
8
Arbitration Law in a Nutshell
©2021 West Academic Publishing