Justia Arbitration & Mediation Opinion Summaries

Archer sued Schein, alleging violations of federal and state antitrust law and seeking both money damages and injunctive relief. The contract between the parties provided for arbitration of any dispute arising under or related to the agreement, except for actions seeking injunctive relief. Schein argued that because the rules governing the contract provide that arbitrators have the power to resolve arbitrability questions, an arbitrator—not the court—should decide whether the arbitration agreement applied. The Fifth Circuit affirmed the denial of Schein’s motion to compel arbitration. A unanimous Supreme Court vacated. Under the Federal Arbitration Act, arbitration is a matter of contract. Courts must enforce arbitration contracts according to their terms. The parties may agree to have an arbitrator decide not only the merits of a particular dispute but also “gateway” questions of “arbitrability.” When the parties’ contract delegates the arbitrability question to an arbitrator, a court may not override the contract, even if the court thinks that the arbitrability claim is wholly groundless. The Court declined “to redesign the Act” and noted that the Act contains no “wholly groundless” exception. Arbitrators are capable of efficiently disposing of frivolous cases and deterring frivolous motions; such motions do not appear to have caused a substantial problem in Circuits that have not recognized a “wholly groundless” exception. The Fifth Circuit may address whether this contract actually delegated the arbitrability question to an arbitrator on remand. View "Henry Schein, Inc. v. Archer & White Sales, Inc." on Justia Law

Despite employment contracts providing for individualized arbitration to resolve employment disputes, employees sought to litigate Fair Labor Standards Act claims through collective actions. The Federal Arbitration Act generally requires courts to enforce arbitration agreements, but the employees argued that its “saving clause” removes that obligation if an arbitration agreement violates some other federal law and that the agreements violated the National Labor Relations Act (NLRA). The National Labor Relations Board ruled that the NLRA effectively nullifies the Arbitration Act in such cases. The Supreme Court disagreed. The Arbitration Act requires courts to enforce the arbitration terms the parties select, 9 U.S.C. 2-4. The saving clause allows courts to refuse to enforce arbitration agreements only on grounds that exist for the revocation of any contract, such as fraud, duress, or unconscionability. The NLRA, which guarantees employees “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively . . . , and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection,” 29 U.S.C. 157, does not mention class or collective actions nor indicate a clear and manifest wish to displace the Arbitration Act. The catchall term “other concerted activities” should be understood to protect the things employees do in exercising their right to free association in the workplace. The Board’s interpretation of the Arbitration Act, which it does not administer, is not entitled to Chevron deference. View "Epic Systems Corp. v. Lewis" on Justia Law