Whether using a smartphone app, downloading music, or buying a product online, we have all agreed to be bound by contracts containing arbitration clauses. The ubiquity of these clauses notwithstanding, these clauses have generated a fair bit of controversy in recent years. Arbitration clause enforceability has become a commonly litigated issue, and, over the past year and a half, the Second Circuit, along with the Southern District of New York, have issued three important decisions interpreting arbitration clause enforceability in both the consumer and employment contexts.
At first glance, these decisions all seem to turn on practical considerations. The opinions carefully track factors like the prominence of the arbitration clause and its location. But arbitration enforceability is not merely an empirical inquiry. In fact, the recent opinions analyze these practical factors to underscore a more fundamental judicial concern: preserving the integrity of contractual bargaining. The central issue is whether there was evidence of a legitimate “meeting of the minds” between the two parties to the contract.
