With respect to Gilmer`s first unresolved issue, the district courts used two different approaches to determine whether the FAA`s exemption applies to employment contracts. The fourth circle is the only circle that has adopted a broad interpretation of the meaning of “interstate trade," so that virtually all employment contracts fall under exclusion. The majority of cycles interpret the term “interstate trade" more narrowly. These tribunals used one of three approaches: a “movement of goods approach", a “class of workers" approach and a “transportation industry" approach. In general, the law in this area evolved after Gilmer, so the courts apply one of these approaches and analyze each arbitration agreement to determine whether the exclusion applies. The idea of replacing pre-dispute arbitration agreements with post-dispute arbitration ignores the fact that the parties` incentives in the environment change dramatically after the dispute. Unlike contentious arbitration, where both parties, regardless of their position and the strength of the case in relation to each other, agree to settle each dispute, in the context of the dispute, each party will insist on arbitration or litigation if it provides them and them alone with the greatest expected benefit. Therefore, it is unlikely that the opposing parties will agree on the same method of dispute settlement in practice. For this reason, in the “real world" there are virtually no arbitration agreements after the dispute. Starting a contested arbitration can be a wonderful addition to a contract.

It assures the parties that their disputes will be resolved in this type of mechanism. However, the parties must be fully aware of the types of disputes that may arise from a contract and the impact that arbitration may have on certain disputes. Choosing a contested arbitration agreement allows the parties to take full control of the resolution of their disputes and gives the parties a picture of dispute resolution on which they can agree. Further criticism of the impugned arbitration agreements comes from the Equal Employment Opportunity Commission (EEOC). In a 1997 policy statement, the agency, which administers various federal anti-discrimination laws, stated that “agreements requiring binding arbitration of claims of discrimination as a condition of employment violate the basic principles set out in those laws." Policy Statement on Mandatory Arbitration (July 11, 1997). Similarly, in a recent speech, the EEOC`s Deputy General Counsel called arbitration employment contracts in future legal discrimination claims “the greatest threat" to civil rights enforcement, saying Gilmer was no longer “relevant" because the waiver of legal proceedings prior to the dispute could not be “knowingly and willingly." Next, what is an arbitration agreement before the dispute? To continue the example above, suppose that when Amil signed the contract with Belinda before making it rigid on the invoice, the two agreed that if any problems arose from their agreement, they would have to solve them through their other neighbor, Donaldo, and would not have the opportunity to go to court. Why would Amil agree to give up his option to go to court? A strong supporter of law and business might argue that Amil could receive an additional payment in exchange for his consent to waive his rights – for example, let`s say Belinda pays Amil $5 more if he waives his right to go to public court. Agreeing that arbitration is the only way to resolve a future dispute is therefore a so-called arbitration agreement before the dispute.

Myth #6: The impugned arbitration provisions incorrectly exclude individuals from filing class actions that summarize minor claims for damages for the decision. The court`s opinion then sings the praises of arbitration: the decision-maker may be a specialist in the field in question, the procedure may be treated confidentially, and the informality of arbitration agreements reduces costs and increases the speed of dispute resolution compared to the prosecution of a case before a court. This Huffington Post article eloquently and succinctly explains why pre-conflict arbitration agreements are a terrible deal for nursing home residents and why we need a federal ban. .