Analysis

How A 1925 Law Evolved To Become Crucial For Employers

Law360 (May 22, 2019, 5:31 PM EDT) -- In the early 1920s, American businesses faced a legal crisis.

The federal courts they relied on to resolve disputes and enforce contracts were overcrowded and otherwise a challenge to navigate, thanks to Prohibition and procedural rules that varied from district to district.

So businesses leaned on arbitration, agreeing to submit their disputes for binding resolution to a third party, generally an expert in their industry. But the courts thwarted that, too, refusing to enforce these arbitration agreements if one party reneged.

In response to this “widespread judicial hostility to arbitration agreements,” as Justice Antonin Scalia would describe it more than 80 years...

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