Understanding Private Arbitration Clauses: From the Boardroom to the Gridiron

photo credit WTAE Private arbitration clauses have become a standard feature of many employment agreements, shaping where and how workplace disputes are resolved including in the NFL and most other sports teams. In broad terms, a private arbitration provision is a contractual commitment that certain disputes between an employer and an employee will be decided by an arbitrator rather than a court. A central feature of U.S. arbitration law is the Federal Arbitration Act (FAA), which generally treats written arbitration agreements in covered contracts as enforceable and places them on the same footing as other contracts. The FAA's policy orientation is strongly pro-enforcement: courts are generally expected to honor the parties' bargain to arbitrate rather than litigate.

Arbitration is typically administered under a set of rules, with procedures that can differ

significantly from civil litigation in court. One foundation of Arbitration is confidentiality.

Unlike court where members of the public can access the documents in front of a judge, in

arbitration the documents are kept private. Another is that the parties can pick who gets to be the arbitrator who acts as a judge and jury. The arbitrator's decision is binding on both of the parties. In the Brian Flores case, the Miami Dolphins put in Flores' contract that the NFL Commissioner would be the arbitrator or judge in any employment dispute. The Second Circuit found that this was fundamentally unfair to Flores since the NFL Commissioner ultimately has an interest that favors the clubs. The district court has allowed Flores to proceed with his claim in court. While it can be very difficult to overturn an agreement to arbitrate, if the agreement is fundamentally unfair or broadly favors one party or the other it is possible to have the agreement declared unenforceable. If you have a question about an arbitration agreement, feel free to reach out to one of our attorneys.