The Federal Arbitration Act: Background and Recent Developments

Publication Date: August 2003

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Justice

Type:

Abstract:

Enacted in 1925, the Federal Arbitration Act ("FAA") seeks to ensure the validity and enforcement of arbitration agreements in any "maritime transaction or . . . contract evidencing a transaction involving commerce." In general, the FAA evidences a national policy favoring arbitration. However, the application of the FAA to various types of arbitration agreements has been the subject of numerous lawsuits. As more employers and businesses use arbitration agreements as a way to avoid the judicial system for resolving disputes, Congress may become more involved by amending the FAA or by creating new legislation to address mandatory arbitration agreements.

This report provides a brief legislative history of the FAA, as well as a review of selected cases that have interpreted the FAA. The report also discusses bills introduced during the 108th Congress that would amend the FAA to address the use of arbitration to resolve employment and specific contract disputes.