500 U.S. 20 (U.S. Sup. Ct. 1991)
Gilmer v. Interstate/Johnson Lane Corp.
Are claims under the Age Discrimination in Employment Act subject to compulsory arbitration under the Federal Arbitration Act pursuant to an arbitration agreement in a securities registration form, and does the FAA's employment-contract exemption prevent enforcement here?
Under the Federal Arbitration Act, written agreements to arbitrate in contracts involving commerce are enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. Statutory claims are arbitrable unless Congress has evinced an intention to preclude a waiver of a judicial forum for those claims. That intent must be discernible in the statute's text, legislative history, or from an inherent conflict between arbitration and the statute's underlying purposes. The party resisting arbitration bears the burden of showing such congressional intent. Generalized attacks on arbitration as a forum (for example, limitations on discovery or industry bias) are insufficient; objections must be tied to the effective vindication of the specific statutory right. The FAA's Section 1 exemption does not apply where the arbitration agreement is not a contract of employment of a class of workers within the exemption, and arbitration agreements remain subject to generally applicable contract defenses such as fraud, duress, or unconscionability.
Yes. ADEA claims may be compelled to arbitration under the FAA, and the arbitration clause in Gilmer's Form U-4 is enforceable. There is no congressional intent in the ADEA to preclude arbitration, and the FAA's Section 1 exemption does not bar enforcement in this case. Gilmer's age discrimination claim must be arbitrated.
Gilmer is a cornerstone in modern arbitration law, especially for employment discrimination claims. It clarifies that federal statutory rights, including ADEA claims, are presumptively arbitrable under the FAA absent a contrary congressional command. It shifts the analytical lens from general distrust of arbitration to a case-specific inquiry focused on whether arbitration allows effective vindication of statutory rights. The decision distinguishes collective-bargaining arbitration from individually agreed arbitration and confirms that inequality of bargaining power alone will not defeat enforcement. Practically, Gilmer paved the way for widespread use of predispute arbitration clauses in employment and reinforced the FAA's reach across statutory regimes.