Federal Arbitration Act

Under the Federal Arbitration Act, arbitration agreements are valid, irrevocable and enforceable except in very limited instances. Arbitration is an alternative to litigation, is favored by the federal courts and judicial review of arbitration decisions is very limited.

Employers may be wise to consider including arbitration provisions in any employment contracts. Arbitration awards may be vacated in only four circumstances:

1) where the award was procured by corruption, fraud or undue means;
2) where there was evident partiality or corruption in the arbitrators;
3) where the arbitrators were guilty of misconduct in refusing to hear evidence pertinent and material to the the controversy or of any other misbehavior by which the rights of any party have been prejudiced; or
4) where the arbitrators exceeded their powers.