Courts in Pennsylvania will typically enforce a valid agreement to submits a dispute to arbitration or mediation. Let’s talk about arbitration, first.
ADR Clause – Arbitration
Pennsylvania has joined at least twenty (20) other states in adopting the Revised Uniform Arbitration Act (RUAA) that now governs all agreements to arbitrate in Pennsylvania, making these clauses enforceable in PA.
Arbitration can come up in numerous areas of law:
- Employment contracts, involving non-compete clauses or non-disparagement agreements,
- Construction contracts, often involving AAA arbitration,
- A home inspection done by home inspection company, relative to the purchase of a dwelling,
- Ride-share (or “rideshare”) contracts involving Lyft or Uber (for more, click here),
- Agreement to waive mechanic’s liens for construction or improvement to real property.
PA enacted the RUAA to address modern issues that come up and to address matters not squarely addressed before, such as:
- How to initiate arbitration proceedings,
- Ensuring that arbitrators will be impartial,
- Immunity for individual arbitrators,
- How discovery will be handled, and
- When sanctions may be ordered
Initiation of Arbitration
The new PA law — which is the RUAA — establishes procedures for the initiation of arbitration. Notice must be given in writing or by an electronic record describing the nature of the controversy and the remedy sought. Notice must be given to all parties to the arbitration agreement, not just to the party against which a claim is filed. A court may vacate an arbitration award for failure to give proper notice of the initiation of arbitration.
A Duty to Disclose
An arbitrator must disclose potential biases, such as a financial interest in the outcome or personal connections to the litigants. This is a continuing duty.
Other Provisions
What are some of the other provisions?
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The Arbitrator Being Immune. An arbitrator has immunity under the RUAA like any publicly elected judge.
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The Discovery Process. The standard under the RUAA permits discovery “as appropriate in the circumstances, taking into consideration the needs of the parties to the arbitration proceeding and other affected parties and the desirability of making the proceeding fair, expeditious and cost-effective.” This also permits discovery against non-parties via power from the Commonwealth of Pennsylvania even though this is only “private” arbitration.
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The Ability to Punish and Sanction. Thanks to the RUAA, the arbitrator may order sanctions and award punitive damages so long as the arbitrator specifies in the award the basis for the determination. As a practical matter, however, the arbitrator is selected with consent of all parties, and therefore the arbitrator – if he or she wants future business from these litigators in new and subsequent cases — will hesitate before coming down too hard on one party or that party’s attorney. This, with the AAA rules, can allow a court to sanction a worker for violating a non-compete agreement. A mediation agreement cannot, however, constitute a mechanic’s lien, which has its own separate procedure through the courts, which clouds title to property.
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The Right to Opt Out and Waive Provisions. Via the RUAA, the parties may modify or restrict the provisions of the RUAA, with certain exception.
Defenses to an Arbitration Clause
The law imposes strict limits on the use an arbitration clause against consumers.
In Duffy v. Tatum, 2026 PA Super 41 (Pa. Super. Ct. Mar. 3, 2026), a moving company caused harm to a customer. When sued in court, the moving company pointed to an arbitration clause buried on its website that the customer had used and sought dismissal of the court case. The Superior Court noted:
- “Trial by jury shall be as heretofore, and the right thereof remain inviolate.” (Pa. Const. art 1, § 6). “Where the provision is buried within hyperlinks or in tiny print, there is a high probability the person was not aware of the arbitration provision, and it is therefore unenforceable.”
- How this will impact future cases: This ruling establishes a stricter burden of proof for demonstrating “unambiguous manifestation of assent” to arbitration in online contracts. Future cases in Pennsylvania will likely require:
Going forward, those seeking to enforce an arbitration clause against a consumer will need to:
- explicitly state on their registration screens that a consumer is waiving their right to a jury trial
- Ensure registration cannot be completed until the user is fully informed of that waiver
- Prominently display the waiver in bold, capitalized text if it is contained within hyperlinked documents.
- Clearly define “arbitration” within the agreement so the average user understands they are giving up their right to a jury trial.
Agreement to Mediate
An agreement to mediate a case is generally enforceable in Pennsylvania. Although Pennsylvania has not adopted the Uniform Mediation Act (UMA) , courts in PA still recognize the enforceability of mediation agreements under common law and principles of equity. See Dodds v. Pulte, 909 A. 2d 348 – Pa: Superior Court 2006, see also Boulevard Association v. Seltzer Partnership, 664 A.2d 983, 987 (Pa. Super 1995).
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