Contracts of Employment: The Scope of the FAA's Exclusion - Chapter 26 - AAA Handbook on Employment Arbitration and ADR - Third Edition
Alfred G. Feliu
Sara Sheinkin Kula
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Alfred G. Feliu is a Partner in Vandenberg & Feliu, L.L.P. in New York City, and is the former chair of the Labor & Employment Law Section of the New York State Bar Association. He is also the Editor-in-Chief of ADR in Employment Law (Bloomberg BNA Books 2015) and serves on the Employment, Complex Commercial, and Class Action Panels of the American Arbitration Association.
Sara Sheinkin Kula is an employment attorney and mediator in New York City. She currently works as the Assistant General Counsel for Town Sports International, LLC. Ms. Kula received her J.D. from the University of Pennsylvania.
AAA Handbook on Employment Arbitration and ADR - Third Edition
There is no question that federal courts, including the U.S. Supreme Court, favor arbitration as a means of resolving disputes. This is particularly true in the realm of employment disputes, where the burden of employment litigation on the courts has become enormous. Whether rooted in a commitment to this essential ADR tool or in the hope of reducing the federal judiciary’s docket, the allegiance of the federal courts to arbitration as a favored dispute resolution vehicle in the employment law context is indisputable.
This commitment is evidenced most conspicuously in the Supreme Court’s decision in Gilmer v. Interstate/Johnson Lane Corp. Seemingly every possible challenge to the arbitration of employment disputes was raised and disposed of in Gilmer, with one conspicuous exception.
The Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq., the bedrock upon which the federal arbitration edifice stands, contains a curious exclusion for “contracts of employment” (hereafter the “Contracts of Employment Exclusion” or the “Exclusion”), which has bred litigation since its inception. The Supreme Court, although noting the issue in a famous (or infamous) footnote in Gilmer, decided to “leave for another day” the resolution of the question of the scope of the Contracts of Employment Exclusion. That day came with the Court’s decision in Circuit City Stores, Inc. v. Adams.