Arbitration as an Alternative Form of Dispute Resolution - Essay Example

The confidentiality of the existence of the process as well as any other disclosure made during the arbitration process is protected. Parties are allowed to restrict access to confidential information and trade secrets. Moreover, the parties are required to select the arbitrator or panel of arbitrators. The arbitrator is required to act honestly and impartially and accord each party a reasonable opportunity to present his or her case.

An arbitrator is also required to implement a procedure appropriate to the situation to arrive at a fair decision. Agreements to arbitrate or arbitration clauses are usually divided into two types. Some clauses are contained in contracts and provide that in case of a dispute, such dispute shall be resolved through arbitration. These contracts will be normal, but with clauses to arbitrate. The other type of arbitration agreement is signed after the dispute has occurred, and the parties agree to resolve this dispute through arbitration.

These later types of arbitration agreements are considered submission agreements. Regardless of the type of arbitration agreement adopted, both parties must consent to the process. Consent is obtained by signing contracts with arbitration clauses or signing submission agreements. Also essential to an arbitration clause is the concept of mutuality. In Wisdom v. AccentCare (paragraph 5), the appellate court held that mutuality is vital in employment contracts and lack of mutuality renders the contract substantially and procedurally unconscionable.

The issue before the court, in this case, was whether an arbitration clause contained in an employment contract requiring the employee to submit all disputes to binding arbitration lacks mutuality or is mutuality inferred by the language of the agreement. In AT&T Mobility v. Concepcion (paragraph b), the contract included a clause that stipulated all actions would be solved through arbitration and barred class arbitration. AT&T sought to compel arbitration as per the contract, but Concepcion opposed this move on the basis that the contract was illegal and unacceptable under state laws as it did not allow class arbitration.

The question before the court was whether the Federal Arbitration Act preempted state laws that did not permit agreements prohibiting class arbitrations. In its decision, the court held that state laws that consider class action waivers in agreements unenforceable are prevented by the Federal Arbitration Act as it stands as an obstacle to arbitration agreements.