Myriam E. Gilles, now of Northwestern, has written Arbitration In Name Only. Here’s the abstract:
Modern arbitration clauses hide a dirty secret: many aren’t arbitration at all. They masquerade as mutual commitments to fair and efficient private dispute resolution but, in truth, are mere imitations of genuine arbitration provisions. Some reserve for the drafter the power to amend or terminate the clause at will without notice or consent from the counterparty; others design the arbitration process to ensure bias from the start; still others depart so radically from the bilateral, informal model blessed by the Supreme Court that they scarcely resemble arbitration at all. These arrangements are “arbitration in name only,” falling outside the Federal Arbitration Act’s (“FAA’s”) scope, which extends only to the enforcement of genuine arbitration agreements.
Much turns on the threshold question of whether a valid arbitration clause exists. Once a court classifies a clause as “arbitration,” the FAA’s preemptive force applies – which means that state-law defenses like unconscionability are narrowly cabined and the entire analysis begins with a presumption favoring enforcement. But when a clause fails to qualify as arbitration in the first instance, the FAA never attaches. No preemption, no presumption in favor of arbitration, no deference – just the application of ordinary contract law. This distinction profoundly shapes outcomes on the ground. The first path dignifies even counterfeit provisions with the label of arbitration, inviting rubber-stamp enforcement by the many judges who reflexively grant motions to compel, while leaving the rare sympathetic judge to chip away at excesses case by case. The second path strips away the facade entirely, recognizing that arrangements bereft of mutuality, neutrality, or simplicity are simply not arbitration as recognized by federal law.
In practice, courts almost never take the second path. Rather than scrutinizing whether disputed clauses possess arbitration’s essential features, judges routinely treat the label itself as dispositive. If a contract calls something “arbitration,” courts classify it as such – enabling sham provisions to proliferate in consumer and employment contracts. This Article intervenes by recovering arbitration’s definitional boundaries. Drawing on the FAA’s text, legislative history, and the Supreme Court’s repeated emphasis on arbitration’s defining features, it identifies three core prerequisites – procedural neutrality, structural informality, and mutual obligation – and argues that clauses lacking these features fall outside the FAA’s domain entirely.
This framework proves particularly urgent as corporations respond to the rise of mass arbitration by amending their arbitration clauses to impose elaborate exhaustion requirements, batching and queuing regimes, and other procedural chokepoints that transform streamlined dispute resolution into an obstacle course. Plaintiffs are increasingly challenging these anti-mass arbitration provisions as exceeding arbitration’s definitional boundaries – yet courts lack principled tools for distinguishing genuine arbitration from its counterfeits. By rigorously scrutinizing whether provisions possess arbitration’s essential characteristics before entertaining enforcement challenges, courts can avoid extending the FAA’s protection to unfair arrangements that bear arbitration’s name but not its substance.
