New AAA Arbitration Rules Take Effect: What Employers Need to Know

Effective May 1, 2025, the American Arbitration Association (AAA) implemented comprehensive revisions to its arbitration rules. These changes apply to both employment and consumer disputes and are designed to improve procedural clarity, efficiency, and fairness. They also reflect modern workplace realities—particularly the increased use of remote work, the engagement of independent contractors, and the rise of mass arbitration filings.

This article summarizes the most important updates and provides practical guidance for employers relying on arbitration agreements.

For tailored advice on how these changes may impact your organization, please contact our Managing Partner, Richard Liu, Esq., at contact@consultils.com.

Updated Rule Titles and Expanded Applicability

The AAA has updated the titles of its rule sets as follows:

• Employment Arbitration Rules are now Employment/Workplace Arbitration Rules and Mediation Procedures.

• Consumer Arbitration Rules are now Consumer Arbitration Rules and Mediation Procedures.

• One notable update is that the employment rules now explicitly apply to disputes involving independent contractors, not just traditional employees. This revision aligns the rules with today’s more flexible and diversified workforce.

  
  

Employers should review and update their arbitration agreements to reflect these new titles and confirm that independent contractor relationships are clearly addressed.

Key Changes Applicable to Both Employment and Consumer Rules

1. Virtual Hearings as the New Standard

The revised rules establish virtual hearings as the default format for both employment and consumer arbitrations. This change responds to the increasing normalization of remote work and is intended to reduce costs, streamline scheduling, and improve accessibility. In-person hearings remain available by mutual agreement or when deemed necessary by the arbitrator.

2. Case Consolidation Authority

The AAA now has the authority to consolidate multiple claims filed by the same party under the same arbitration agreement. When claims arise from separate agreements, the AAA may require them to proceed independently. Arbitrators retain ultimate discretion in determining whether consolidation is appropriate.

3. Structured Preliminary Hearings

The initial procedural meeting has been renamed the “Preliminary Hearing” and now follows a more standardized structure. These enhancements are designed to encourage early case organization, clarify timelines, and promote a smoother path forward. The updated Employment Rules also include a set of defined procedures that help parties and arbitrators plan more effectively from the start of arbitration.

4. Extended Stay Period

If a party seeks court intervention at the outset of arbitration—such as challenging the enforceability of the arbitration agreement—the AAA will now stay proceedings for up to 90 days, an increase from the previous 60. This extension gives courts more time to rule on threshold legal issues before arbitration moves forward, reducing the risk of conflicting processes and improving procedural clarity.

5. Strengthened Fee Enforcement

The AAA now specifies that failure to pay administrative or arbitrator fees may result in the organization declining or ceasing to administer the arbitration. This is consistent with California Code of Civil Procedure section 1281.98 and applies AAA-wide. Employers should ensure timely processing of arbitration fees to avoid disruptions or risk defaulting to court proceedings.

6. Enhanced Arbitrator Authority

Under the revised rules, arbitrators are granted broader authority to manage proceedings, including:

• Deciding which arbitration clause governs the case.

• Managing the scope and format of discovery, including subpoenas and depositions.

• Ruling on dispositive motions after evaluating cost and efficiency.

• Clarifying or modifying awards when necessary.

• Issuing sanctions for procedural noncompliance.

  
  

These changes are designed to give arbitrators greater control over the arbitration timeline and procedural fairness.

Provisions Unique to Each Rule Set

1. Emergency Relief Under Employment Rules

Emergency relief procedures have been fully incorporated into the employment arbitration rules. Such relief is available if:

• The arbitration agreement expressly allows it, or

• The parties agree after the dispute arises

2. Mediation and Appeals Under Consumer Rules

The revised consumer rules include:

• Integrated Mediation Procedures: Mediation may proceed without a separate filing fee if arbitration is already underway. Mediations default to a virtual format and follow a fixed compensation structure.

• Appellate Arbitration Process: Where permitted by contract, AAA may administer appeals to a three-arbitrator panel. Such appeals must comply with the AAA’s Consumer Due Process Protocol and fee schedule.

No Changes to Mass Arbitration Rules

Although mass arbitration remains a pressing concern for many organizations, the AAA has not updated its Mass Arbitration Supplementary Rules. In 2024 alone, over 280,000 mass arbitration cases were filed—yet fewer than 1% reached a final award. The potential for bulk filings remains high, and employers should consider revising arbitration clauses to address procedural safeguards and reduce exposure to coordinated mass claims.

What Employers Should Do Now

• Review arbitration agreements to reflect the new rule titles and expanded scope.

• Ensure internal processes are in place for timely fee payments and remote hearing participation.

• Prepare legal and HR teams for greater arbitrator involvement in discovery and motion practice.

• Assess mass arbitration exposure and adjust contract language if needed.

  
  

If your organization relies on arbitration to manage employment or consumer disputes, now is the time to ensure your policies and agreements align with the AAA’s updated rules. For assistance, please contact our Managing Partner, Richard Liu, Esq., at contact@consultils.com.

Disclaimer: The materials provided on this website are for general informational purposes only and do not, and are not intended to, constitute legal advice. You should not act or refrain from acting based on any information provided here. Please consult with your own legal counsel regarding your specific situation and legal questions.

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Richard Liu, Esq. is the Managing Counsel of ILS. He serves clients as a management-side defense lawyer specializing in employment and business litigation. Richard is also an expert on litigation prevention and compliance. He regularly advises Fortune 500 companies and startups on employment, labor, and commercial matters.

Email: contact@consultils.com | Phone: 626-344-8949