The Impact of the 2024 Elections on Arbitration and Mediation: Insights and Implications
By Caitlin Saint-Jean and S. Pierre Paret
The 2024 elections have already brought significant changes to the political landscape, with notable shifts in federal and state governance. Donald J. Trump's return to the White House, a Republican-controlled Senate (53-47 majority) and the GOP's maintaining a slim majority in the House of Representatives (220-215) create a new environment for arbitration and mediation stakeholders, including the American Arbitration Association® (AAA®). These changes likely will influence the legislative and regulatory outlook for alternative dispute resolution (ADR) in the coming years.
Implications for Federal Arbitration Legislation
The AAA anticipates that the federal outlook for ADR will remain relatively stable, with it unlikely that sweeping anti-arbitration legislation, such as the FAIR Act, will become law. However, Congress might explore narrower initiatives, such as reforms addressing the arbitration of Servicemembers Civil Relief Act (SCRA) and Uniformed Services Employment and Reemployment Rights Act (USERRA) claims. Legislation addressing the use of AI- and algorithm-driven decision-making could also gain some bipartisan support.
State-level Dynamics
At the state level, the focus on arbitration legislation is likely to intensify. With limited progress expected at the federal level, opponents of pre-dispute arbitration agreements for consumer and employment disputes may turn their efforts toward state capitals, particularly in key states such as California and New York. While these and other states could see renewed attempts to limit arbitration, the Federal Arbitration Act (FAA) and supportive Supreme Court precedents generally set boundaries on the impact of states' laws.
State legislatures often model their efforts on similar bills introduced elsewhere. This could lead to a patchwork of pro- and anti-arbitration laws. ADR professionals and stakeholders should monitor state-law developments accordingly to keep abreast of laws potentially impacting ADR.
The Role of the Executive Branch
At this point, it is difficult to predict what the new administration will do, but a business-friendly approach is likely. While the continued role of agencies such as the Consumer Financial Protection Bureau (CFPB), Federal Trade Commission (FTC) and Equal Employment Opportunity Commission (EEOC) is currently unclear, these agencies could influence arbitration policies through regulatory and other actions and bear close monitoring.
AAA's Strategic Response
The AAA continues to position itself as a neutral, informative resource in legislative and regulatory processes, drawing on our near-100 years of experience in ADR. By providing alternative language and technical recommendations, the AAA works to address legislators' and regulators' concerns while promoting ADR. Key pillars of its strategy include:
- Advocacy based on the AAA's consumer, employment and healthcare Due Process Protocols to address common criticisms of arbitration.
- Proposing a "third path" to bridge divides between proponents and critics of consumer and employment arbitration. One example is proposed legislation drafted several years ago in the U.S. Senate titled "The Consumer and Employment Arbitration Due Process Act," which sought to codify at the federal level several elements of the AAA's employment and consumer Protocols.
Looking Ahead
The political dynamics following the 2024 elections present both challenges and opportunities for the ADR field. While federal action against arbitration appears unlikely, state-level initiatives and the evolving regulatory landscape warrant close attention. The AAA will proactively engage in these arenas to safeguard the integrity and accessibility of arbitration and mediation as vital tools for resolving disputes.
This election cycle underscores the importance of vigilance, collaboration and adaptability in navigating the shifting political and legal environment. As the AAA works to promote fair and effective ADR practices, stakeholders can remain confident in the AAA's commitment to advancing dispute resolution in the public and private sectors