Legal Definitions - Federal Arbitration Act

The Federal Arbitration Act is a law that protects the validity and enforceability of many arbitration agreements. This means that if two parties agree to settle a dispute through arbitration, the agreement is considered legally binding and cannot be easily overturned by a court.

For example, if a person signs a contract with a company that includes an arbitration clause, and later has a dispute with the company, they may be required to go through arbitration instead of taking the matter to court. The Federal Arbitration Act ensures that this agreement is upheld.

However, there are some exceptions to the Federal Arbitration Act. For example, it does not apply to contracts of employment for certain types of workers, such as seamen and railroad employees. This means that these workers may still have the option to take their disputes to court, even if they have signed an arbitration agreement.

Recently, a new provision was added to the Federal Arbitration Act that prohibits claims involving sexual harassment or sexual assault from being forced into mandatory arbitration. This means that victims of sexual harassment or assault may still have the option to take their claims to court, even if they have signed an arbitration agreement.