Short Circuiting Circuit City? Judicial Enforcement of Mandatory Employment Arbitration

Abstract

Our research provides an empirical assessment of judicial enforcement of mandatory employment arbitration agreements. Results from a sample of 264 districts and 96 appellate decisions for the period 1954 through September 1, 2002, show that enforcement of arbitration agreements was lowest before the Supreme Court’s Gilmer decision. After Gilmer, district court enforcement of arbitration agreements substantially increased but appellate court enforcement substantially declined. Following the Court’s Circuit City decision, district court enforcement of arbitration agreements remained unchanged, while the appellate court enforcement rate substantially increased. In addition, although enforcement of arbitration agreements varied widely by circuits, there was no discernible geographic pattern. In sum, federal courts enforce a majority of the contested arbitration agreements, but they are willing to deny enforcement to arbitration agreements they believe are unfair to employees.