The Lawletter Vol 44 No 2
When an arbitration agreement is in effect, who decides whether an employment dispute—or any dispute for that matter—is arbitrable? The Supreme Court recently released a pair of decisions that address this issue under the Federal Arbitration Act (FAA), Henry Schein, Inc. v. Archer & White Sales, Inc., ___ S. Ct. ___, 202 L. Ed. 2d 480, 2019 WL 122164 (Jan. 8, 2019), and New Prime, Inc. v. Oliveira, ___ S. Ct. ___, 2019 WL 189342 (Jan. 15, 2019).
Each case involved an arbitration agreement that contained a clause delegating the issue of arbitrability of disputes to an arbitrator rather than a court. The Supreme Court had previously held that such clauses are enforceable under the FAA. Rent-A-Center W., Inc. v. Jackson, 561 U.S. 63 (2010) (applying 9 U.S.C. § 2). Some courts of appeals developed an exception to this general rule, holding that a court need not grant a motion to compel arbitration under § 4 of the FAA if the argument that the underlying claim is within the scope of the arbitration agreement is "wholly groundless." These courts reasoned that such an exception would enable courts to block frivolous attempts to transfer disputes from the court system to arbitration.Read More