Legal Definitions - American Arbitration Association

The American Arbitration Association (AAA) is a prominent national organization in the United States that provides services for resolving disputes outside of traditional court litigation. It maintains a large roster of independent, impartial arbitrators and mediators who are experts in various fields. The AAA facilitates the arbitration process, offering rules, administrative support, and a neutral forum for parties to present their cases and receive a binding decision, particularly in commercial and labor-related disagreements.

Here are some examples of how the American Arbitration Association might be involved:

• Commercial Contract Dispute: A software development company and its client have a significant disagreement over the final payment and the scope of work for a custom application. Their original contract included a clause stating that any disputes arising from the agreement would be resolved through binding arbitration administered by the AAA. Instead of filing a lawsuit, both parties submit their dispute to the AAA, which helps them select an arbitrator with expertise in technology contracts. The arbitrator then hears evidence from both sides and issues a final, legally binding decision, avoiding a lengthy court battle.

• Labor-Management Conflict: A large manufacturing company and the union representing its factory workers are at an impasse during contract negotiations regarding new safety protocols and wage increases. Their collective bargaining agreement specifies that unresolved grievances or negotiation impasses will be submitted to arbitration through the AAA. The AAA provides a neutral arbitrator, often an expert in labor relations, who reviews the arguments and evidence from both the company and the union, and then makes a decision that resolves the dispute, allowing both parties to move forward.

• Construction Project Disagreement: A homeowner hired a contractor to build a significant home addition, but they later disagree on the quality of the finished work and the final payment amount. Their construction contract stipulated that any disputes would be settled through binding arbitration with the AAA. The AAA administers the arbitration process, assisting the homeowner and contractor in selecting an arbitrator, likely an expert in construction law or engineering, from its panel. This arbitrator evaluates the claims, potentially inspects the work, and renders a decision that resolves the dispute over quality and payment, providing a quicker resolution than traditional litigation.