Massachusetts Arbitration Clauses: Are They Enforceable?

Arbitration Clauses Explained

An arbitration clause directs disputes to private resolution through an arbitrator rather than the court system. In Massachusetts, these clauses appear in employment agreements, consumer contracts, financial service agreements, and real estate transactions.

Massachusetts Arbitration Law

Massachusetts follows the Massachusetts Uniform Arbitration Act (M.G.L. c. 251), which was updated in 2019 to align with the Revised Uniform Arbitration Act. The Federal Arbitration Act applies to contracts involving interstate commerce.

Massachusetts courts generally uphold arbitration clauses. The Massachusetts Supreme Judicial Court in Warfield v. Beth Israel Deaconess Medical Center (2016) reinforced the enforceability of arbitration agreements in the employment context while noting that standard contract defenses remain available.

Grounds for Challenging Enforcement

• Unconscionability — Massachusetts courts evaluate both the process of contract formation and the substance of the terms. A clause imposed on a party with no bargaining power that includes oppressive terms may be struck down
• Violation of statutory rights — While arbitration of statutory claims is generally permitted, Massachusetts courts have examined whether the arbitration process adequately vindicates rights under state consumer protection law (M.G.L. c. 93A)
• Waiver — A party may waive the right to arbitrate by engaging in extensive litigation conduct that prejudices the other party
• Lack of agreement — If the arbitration clause was not clearly part of the agreed-upon contract terms

Red Flags to Identify

• The clause limits your ability to bring claims under Massachusetts Chapter 93A (consumer protection)
• Excessive arbitration fees that exceed what court filing would cost
• The agreement allows only the drafter to select from a pool of arbitrators
• There is no right to a reasoned written decision from the arbitrator

When to Consult a Lawyer

Consider consulting a Massachusetts attorney if an arbitration clause appears to restrict your statutory rights, particularly under Chapter 93A, or if the terms of the clause are significantly one-sided. An attorney can assess whether the clause would survive judicial scrutiny.

This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance specific to your situation.