Should Your Contracts Require Arbitration?

Most businesses decide how their disputes will be resolved years before any dispute exists, usually by signing whatever clause came with the form contract. That clause decides who hears the case, how much of the other side's evidence you get to see, whether a jury is involved, and whether anyone can appeal.

Large companies have favored arbitration for decades, mainly because the Supreme Court lets them pair it with a waiver of class actions. Lately the tool has started to cut the other way. The American Arbitration Association received roughly 280,000 individual mass-arbitration demands in 2024 and just under 105,000 in 2025, spread across 92 and 88 separate campaigns. In each campaign, claimants' lawyers file hundreds or thousands of individual cases at once, and the company pays most of the filing fees on every one of them. Then, in May 2026, the Supreme Court decided two arbitration cases. One makes awards easier for businesses to enforce. The other takes a group of workers out of arbitration altogether.

The clause in your form contract deserves a second look.

What arbitration is

Arbitration is a private trial. The parties agree, usually in a clause signed long before any dispute, that a neutral arbitrator or a panel of three will decide their disputes instead of a judge or jury. The arbitrator hears evidence, applies the law, and issues an award. A court will then turn that award into a judgment that can be enforced like any other.

Two statutes govern most arbitration clauses in Florida. The Federal Arbitration Act covers any contract involving interstate commerce, which describes most business contracts, and makes arbitration agreements enforceable on the same footing as other contracts. The Revised Florida Arbitration Code says the same thing in state law: a written agreement to arbitrate is "valid, enforceable, and irrevocable except upon a ground that exists at law or in equity for the revocation of a contract." § 682.02(1), Fla. Stat.

What makes arbitration different is how little a court can do afterward. A judge may vacate an award only for narrow reasons such as fraud, corruption, evident partiality, refusing to hear material evidence, or the arbitrator exceeding the arbitrator's powers. 9 U.S.C. § 10(a); § 682.13(1), Fla. Stat. Getting the law wrong is not on either list. The Florida Supreme Court has held that an arbitrator who misreads the contract or the law has not "exceeded" the arbitrator's powers. Visiting Nurse Ass'n of Fla., Inc. v. Jupiter Med. Ctr., Inc., 154 So. 3d 1115 (Fla. 2014). And the parties cannot contract for broader review. § 682.014(3)(g), Fla. Stat.; Nat'l Millwork, Inc. v. ANF Grp., Inc., 253 So. 3d 1261 (Fla. 4th DCA 2018).

Why the largest companies use it

The main reason is the class-action waiver. In AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011), the Supreme Court held that the Federal Arbitration Act preempts state rules that refuse to enforce class waivers in consumer arbitration agreements. In Epic Systems Corp. v. Lewis, 584 U.S. 497 (2018), it applied the same principle to employees. A company that pairs arbitration with a class waiver can require every customer or employee to bring claims one at a time. Most people with a $40 billing complaint never will.

The other reasons are familiar to anyone who has tried a case:

• Privacy. There is no public docket, and the award is usually confidential. A bad result does not become a headline or a roadmap for the next claimant.
• No jury. The company trades the risk of a large, emotional verdict for a decision-maker who writes for a living.
• Less discovery. The arbitrator decides how much document production and how many depositions each side gets. § 682.08(3), Fla. Stat. Less discovery means lower cost and fewer internal emails read aloud.
• Finality. Because error of law is not a ground for vacatur, a dispute usually ends with the award. Neither federal nor Florida law lets the parties contract for broader court review. Hall Street Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576 (2008).
• Experience. A company that arbitrates often knows the providers, the rules, and the arbitrators. The person on the other side usually does not.

None of these advantages belongs only to large companies. A Florida business with a few dozen customer contracts gets the same privacy, finality, and choice of decision-maker. It also inherits the same risks.

What it costs you

Arbitration is often sold as the cheaper option. For a simple dispute it usually is. For a complex one, it often isn't. Judges are free, and arbitrators bill by the hour. A three-member panel in a commercial case can cost each side more in arbitrator fees than the filing fee, the court reporter, and the mediator combined.

Mass arbitration is the larger risk, and it comes straight out of the class waiver. Under the consumer and employment rules of both major providers, the business pays most of the fees on every individual case. When a law firm files 5,000 identical demands, the company owes fees on 5,000 cases before any arbitrator looks at the merits. Under the AAA's mass-arbitration rules, the claimants as a group pay a flat $3,125 at filing, and no individual consumer who doesn't qualify for a waiver pays more than $200 per case. The business pays the rest. The fees, in other words, do most of the work.

How a mass arbitration builds cost

1. Thousands of identical demands filed at once
2. Business pays most filing fees on every case
3. Process arbitrator decides threshold issues
4. Merits arbitrators appointed, more fees per case

AAA consumer mass-arbitration cases at the merits stage closed in 2025:

• 72% settled
• 96% of those settled before a merits arbitrator was appointed
• Fewer than 1% were decided by award

The other trade-offs:

• No appeal for legal error. The finality that protects a winner traps a loser. If the arbitrator misreads the contract, the award usually stands.
• Weak early exits. An arbitrator may decide a claim on a summary motion. § 682.06(2), Fla. Stat. In practice, many arbitrators prefer to hear the evidence, so a weak claim can survive longer than it would in court.
• Limited discovery cuts both ways. It helps when the other side wants your documents. It hurts when you need theirs.
• Non-parties are harder to reach. An arbitrator can subpoena a non-party to a hearing, 9 U.S.C. § 7, but in federal court in Florida that means the non-party must appear in person before the arbitrator. Pre-hearing depositions and document subpoenas to non-parties are not available. Managed Care Advisory Grp., LLC v. CIGNA Healthcare, Inc., 939 F.3d 1145 (11th Cir. 2019).
• No precedent. A win against one claimant does nothing to stop the next.
• Some claims can't be forced into arbitration. A worker or other claimant alleging sexual harassment or sexual assault may choose court regardless of the clause, for claims arising on or after March 3, 2022. 9 U.S.C. § 402(a). Federal courts in Miami have read that to take the whole case out of arbitration, not just the harassment claim. Doe (J.K.) v. Celebrity Cruises, Inc., 792 F. Supp. 3d 1371 (S.D. Fla. 2025). Transportation workers are outside the federal act altogether. 9 U.S.C. § 1. In May 2026, a unanimous Supreme Court held that a local delivery driver can qualify for that exemption even though he never crossed a state line. Flowers Foods, Inc. v. Brock, 608 U.S. 380 (2026).

What courts haven't settled

Which delivery and warehouse workers are exempt. Flowers Foods rejected the employer's proposed bright line, but it did not draw a new one. The Court kept its earlier test, which asks whether the worker plays a "direct," "necessary," and "active" role in moving goods across borders, and left lower courts to apply it worker by worker. A Florida company that relies on arbitration with its drivers, dispatchers, or warehouse staff now faces a fact question every time one of them sues.

Whether mass-arbitration procedures will hold up. Companies have responded to mass filings by writing batching and bellwether procedures into their clauses. In Heckman v. Live Nation Entertainment, Inc., 120 F.4th 670 (9th Cir. 2024), the Ninth Circuit refused to enforce Ticketmaster's clause, which sent claims to a new provider whose mass-arbitration rules let a few bellwether rulings bind everyone else in the batch. Commentators read the decision as limited to those unusual rules. We found no Florida appellate decision or Eleventh Circuit decision on a mass-arbitration protocol.

What happens when a company won't pay the fees. Courts disagree. In Abernathy v. DoorDash, Inc., 438 F. Supp. 3d 1062 (N.D. Cal. 2020), the court ordered the company to arbitrate thousands of courier claims and pay the roughly $12 million in fees it had agreed to. In Wallrich v. Samsung Electronics America, Inc., 106 F.4th 609 (7th Cir. 2024), more than 35,000 consumers filed demands, Samsung declined to pay about $4.1 million in fees, and the Seventh Circuit held that the trial court could not order it to pay. Florida's federal courts lean toward waiver. The Eleventh Circuit has said, in an unpublished decision, that a company that drafts a clause and then refuses to pay the filing fee gives up its right to arbitrate. Freeman v. SmartPay Leasing, LLC, 771 F. App'x 926 (11th Cir. 2019). A federal court in Miami reached the same result for an employer that refused to pay reduced AAA fees in a collective action. Figueredo-Chavez v. RCI Hosp. Holdings, Inc., 574 F. Supp. 3d 1167 (S.D. Fla. 2021). A Florida company that refuses to pay may find itself back in court on claims it expected to arbitrate.

Which theories come next. Mass filings follow the statutes that offer fixed damages per claimant. A national firm that tracks these filings reports that claimants' lawyers are turning to Florida's Security of Communications Act, ch. 934, Fla. Stat., as California's wiretap theories narrow. Any Florida business with a website, an app, or a tracking pixel should assume its consumer clause will eventually be tested.

New consumer mass-arbitration demands filed with the AAA, 2025

Entertainment and gaming42,299

Retail32,203

Financial services8,584

Hospitality and travel8,527

Telecom­munications5,978

010K20K30K40K

Deciding whether to include a clause

The right answer depends less on the size of your company than on which side of the dispute you expect to be on. A business that mostly gets sued by customers or employees has different interests from one that mostly sues to collect.

Two questions sort out most cases. If you lost this dispute, would you want to appeal? And if 2,000 customers filed the same claim on the same day, could you afford the filing fees? A yes to the first points toward court. A no to the second means the clause needs mass-arbitration terms or a different approach altogether.

The clause also has to survive a challenge. In Florida, a party trying to escape an arbitration agreement as unconscionable must show both procedural and substantive unconscionability. The two are weighed on a sliding scale, so a more one-sided term needs less proof of an unfair signing process. Basulto v. Hialeah Automotive, 141 So. 3d 1145 (Fla. 2014). The buyers in Basulto spoke only Spanish and signed dealership documents written in English, and the trial court found no agreement to arbitrate at all. Businesses that contract in more than one language should take note.

If you already have a clause, or are drafting one

Most clauses we review were copied from somewhere else. Copying is fine when the source fits your business. When it doesn't, the clause tends to fail at the worst moment.

After a motion to compel arbitration in federal court

1. Motion to compel arbitration in federal court
2. Granted: the case is stayed, not dismissed
3. After the award, the same judge confirms or vacates it

If instead the court denies the motion to compel:

• The company may appeal immediately
• The trial-court case is automatically stayed while the appeal is pending
• In Florida state court, an order granting or denying arbitration is appealable now

Check these points:

1. Decide who decides. Florida's code gives the court the questions of whether an agreement exists and what it covers, unless the parties agree otherwise. § 682.02(2), Fla. Stat. The Florida Supreme Court and the Eleventh Circuit both treat a clause that adopts the AAA's rules as clear evidence that the parties sent those questions, including challenges to the agreement as a whole, to the arbitrator. Airbnb, Inc. v. Doe, 336 So. 3d 698 (Fla. 2022); Attix v. Carrington Mortg. Servs., LLC, 35 F.4th 1284 (11th Cir. 2022). Say which you want.
2. Carve out what belongs in court. Injunctions to protect trade secrets or enforce a noncompete, intellectual-property claims, small-claims matters, and collections often work better in court. Make the carve-out apply to both sides. A carve-out that lets only the business go to court invites an unconscionability challenge.
3. Plan for mass filings. If the clause covers consumers or employees, decide in advance how 500 or 5,000 identical demands will be handled. That means choosing a provider whose mass-arbitration rules you've read, and considering pre-filing notice, an informal dispute period, and staged or batched filing. Avoid untested procedures that let a handful of rulings bind everyone else.
4. Fill in the basics. Name the provider and the rule set, the number of arbitrators and how they're chosen, the seat of the arbitration, governing law, limits on discovery, who pays fees, and whether the arbitrator must explain the award in writing.
5. Keep it even-handed. Don't shorten limitations periods, cap remedies a statute provides, or make the other side bear costs it couldn't bear in court. A severability clause helps, but it won't save a term that cuts off statutory remedies if that term goes to the heart of the bargain. Shotts v. OP Winter Haven, Inc., 86 So. 3d 456 (Fla. 2011). Decide, too, whether the class waiver should survive if a court strikes it.
6. Match the language to the signer. If your customers or employees read Spanish, give them the clause in Spanish. Basulto is the cautionary tale.
7. Use the procedural protections. In federal court, a judge who compels arbitration must stay the case rather than dismiss it if a party asks. Smith v. Spizzirri, 601 U.S. 472 (2024). The case stays in front of that judge, who can later confirm or vacate the award. Jules v. Andre Balazs Props., 608 U.S. 200 (2026). If the judge refuses to compel arbitration and you appeal, the trial-court case is stayed automatically while the appeal is pending. Coinbase, Inc. v. Bielski, 599 U.S. 736 (2023). In Florida state court, an order granting or denying arbitration can be appealed immediately. Fla. R. App. P. 9.130(a)(3)(I); § 682.20(1)(a), Fla. Stat.
8. Review it every year. Provider rules and fee schedules change, and so does the law. A clause written in 2019 predates nearly every case in this article.

The bottom line

Arbitration is a tool, not a policy. It gives a business privacy, speed, a decision-maker it helped choose, and a result that is very hard to overturn. It takes away the appeal, much of the discovery, and, for companies that deal with the public, some control over cost. The class waiver that made arbitration attractive to large companies is the same feature that now lets claimants' lawyers file thousands of cases at once.

The businesses that get hurt are rarely the ones that chose arbitration. They are the ones that never chose at all and are still using a clause from a template they didn't read.

Saltiel Law Group drafts and reviews arbitration clauses for customer, vendor, employment, partnership, and real estate contracts, and we litigate and arbitrate the disputes those contracts produce. If you'd like us to look at your clause before someone tests it, call us at (305) 735-6565 or contact us.