Justia Arbitration & Mediation Opinion Summaries

K.F.C., age 11, signed up for a Snapchat account. Snapchat's terms specify that a person must be at least 13 to have an account. K.F.C. lied about her age. Before she turned 18, K.F.C. sued, alleging that Snapchat’s features amount to facial recognition, which violates the Illinois Biometric Privacy Act, K.F.C. acknowledges that she accepted Snapchat’s terms but denies that its arbitration clause binds her although she continued using Snapchat after turning 13.The Seventh Circuit affirmed the dismissal of the case. An arbitrator, not a court, must decide whether K.F.C.’s youth is a defense to the contract’s enforcement. While even the most sweeping delegation cannot send the contract-formation issue to the arbitrator, state law does not provide that agreements between adults and children are void but treats such agreements as voidable (capable of ratification), so the age of the contracting parties is a potential defense to enforcement. The Federal Arbitration Act provides that arbitration is enforceable to the extent any promise is enforceable as a matter of state law, 9 U.S.C. 2. A challenge to the validity (as opposed to the existence) of a contract goes to the arbitrator; K.F.C.’s arguments about her youth and public policy concern the contract’s validity, not its existence. View "K.F.C. v. Snap Inc." on Justia Law

The employers were formerly contributing members of the Teamsters Local Union No. 293 Pension Plan. In 2007-2008 each employer reached an agreement with the Plan to terminate its membership. They were required to pay, and have paid, “withdrawal liability” reflecting each employer’s share of unfunded, vested pension benefits under the Multiemployer Pension Plan Amendments Act, 29 U.S.C. 1381–1461. Under the Act, if the plan is terminated altogether by a “mass withdrawal” of the remaining members within three years, the earlier withdrawing members may be subject to additional “reallocation liability.” Disputes about the amount of such reallocation liability are subject to mandatory arbitration. The employers claim that a 2009 mass withdrawal was expedited to occur within the three-year period in order that they would be subject to reallocation liability. The Plan trustees sought more than $12 million in additional funds from the employers. The district court dismissed their suit for failure to complete arbitration. The Sixth Circuit affirmed. The Act requires that the claim of “sham” mass withdrawal be arbitrated. View "Knall Beverage, Inc. v. Teamsters Local Union No. 293 Pension Plan" on Justia Law