Legal Memorandum: Arbitration Clauses in Contracts

Issue: Under federal law, may an arbitration clause in a contract legally be disregarded? ![TEXT:

Area of Law: Alternative Dispute Resolution, Business Organizations & Contracts
Keywords: An arbitration clause in a contract; Denying arbitration
Jurisdiction: Federal
Cited Cases: 886 F. 2d 188; 624 F. Supp. 709; 469 F. 2d 610; 209 F.3d 1060; 525 U.S. 33; 611 F.2d 580; 66 F.3d 988; 475 U.S. 643
Cited Statutes: None
Date: 11/01/2000

It is black-letter law that the plain contractual language controls.  See, e.g., International Ass’n of Machinists & Aerospace Workers v. David Mfg. Co., 624 F. Supp. 709 (N.D. Iowa 1985) (arbitrator examines and applies language and terms of collective bargaining agreement).  See, e.g., Marquez v. Screen Actors Guild, Inc., 525 U.S. 33 (1998) (concerning interpretation of a union security clause requiring union membership as a condition of employment, but not explaining statutory right to satisfy condition by paying membership fees); Bloom v. NLRB, 209 F.3d 1060 (8th Cir. 2000) (union security clause may be interpreted with implied reference to statutory underpinning).

            See, e.g., Franklin Elec. Co. v. UAW, 886 F. 2d 188 (8th Cir. 1989) (arbitration award based on essence of parties’ agreement was valid and enforceable); International Bhd. of Elec. Workers v. Radio Thirteen-Eighty, Inc., 469 F. 2d 610 (8th Cir. 1972) (arbitration clause in collective bargaining agreement encompassed interpretation of agreement’s terms; only forceful evidence of intent to exclude arbitration in a specific case will stop submission to arbitration).

Further, denying arbitration is contrary to long-standing and oft-cited public policy preferences.  See, e.g., AT&T Techs., Inc. v. Communications Workers of Am., 475 U.S. 643, 648 (1986) (“These precepts . . . have led to continued reliance on arbitration . . . as the preferred method of resolving disputes arising during the term of a collective-bargaining agreement.  We see no […]

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