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United States Supreme Court Rules That the Federal Arbitration Act Applies to Pre-dispute Arbitration Agreements in the Employment Context

March 01, 2001

By Paul Hastings Professional

On March 21, 2001, the Supreme Court issued an important decision relating to pre-dispute arbitration agreements between employers and employees. In Circuit City Stores, Inc. v. Adams, (March 21, 2001), the Court declared that the Federal Arbitration Act applies to promises to arbitrate in the employment context just as it does to other arbitration agreements. The Adams decision also reaffirms the Court's prior decisions regarding the suitability of employment discrimination disputes for arbitration: "We have been clear in rejecting the supposition that the advantages of the arbitration process somehow disappear when transferred to the employment context." Adams thus is important to all employers who have adopted or are contemplating adopting pre-dispute arbitration programs.