Arbitration of disputes is often viewed as preferable to litigation. Arbitration is generally faster and cheaper; it involves only limited pretrial discovery, the proceedings take place in private, and the results are usually final and unappealable. Since arbitration means no jury trial, an employer that fears a runaway jury and a runaway damage award may view arbitration as a highly desirable alternative to litigation.
Both the Federal Arbitration Act (FAA) and its state counter- parts say that a contract provision for resolution of future disputes
by arbitration is valid and enforceable. The courts have gone so far as to rule that the law favors arbitration and that when a contract contains an arbitration clause, a presumption arises that all disputes relating to the contract must be arbitrated. These principles have been applied to labor disputes under collective bargaining agreements and to employment disputes in the securities industry, in which arbitration clauses have been common for years. Arbitration provisions are now finding their way into more and more con- tracts, including routine employment agreements.
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