When it comes to enforcement of arbitration agreements, the Federal Arbitration Act, 9 U.S.C.A. §§1-16, has been the law of the land since it was enacted nearly a century ago. The FAA was passed by Congress “to reverse the longstanding judicial hostility to arbitration agreements … and to place arbitration agreements on the same footing as other contracts.” Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24 (1991) (wrongful firing claim under ADEA subject to arbitration agreement). It declares arbitration is a favored means of dispute resolution (9 U.S.C.A. §1), and agreements requiring arbitration of certain disputes are to be enforced in the same manner and to the same extent as any other contractual provision (9 U.S.C.A. §2). Cases construing the FAA have concluded that any doubts about whether a particular dispute is subject to arbitration must be resolved in favor of arbitration. See, e.g., Moses H. Cone Memorial Hosp., 460 U.S. 1, 24-25 (1983). New Jersey state courts have made similar pronouncements about the enforceability of arbitration agreements, see, e.g., EPIX Holdings Corp. v. Marsh & McLennan Companies, 410 N.J. Super. 410, 453, 477 (App. Div. 2009), although it can be argued that such statements are lip service.
Despite the universal applicability of the FAA, a difference of opinion between New Jersey’s state and federal courts regarding the enforceability of arbitration agreements has emerged, particularly in cases involving employment and consumer contracts. New Jersey’s state courts, in many cases, appear to have applied a more stringent standard of review to arbitration agreements in consumer and employment contracts than their federal court counterparts. Indeed, it can be argued that many New Jersey state court arbitration enforcement decisions are inconsistent with the FAA’s mandates.
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