When a “dispute” arises under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA) depends on when the specific facts of the case show a “conflict or controversy” exists between the parties, the U.S. Court of Appeals for the Eighth Circuit held in affirming the trial court’s order denying a motion to compel arbitration. Famuyide v. Chipotle Mexican Grill, Inc., No. 23-3201 (Aug. 5, 2024).
HR - Arbitration Issues
Ninth Circuit Continues to Expand Transportation Worker Exemption Under Federal Arbitration Act
Courts are finding more workers who do not physically transport goods or people across state lines to be transportation workers exempt from arbitrating their claims under the Federal Arbitration Act (FAA).
MYR 2024: Trends + Developments in the Arbitration Space
By almost any measure, 2024 is a memorable year for employment and labor law — and it’s only halfway done.
Recent Court Rulings on FAA’s Transportation Worker Exemption May Require Employers to Update Their Arbitration Agreements
The U.S. Department of Labor estimates 56 percent of all nonunion private-sector employees are subject to mandatory arbitration agreements. Many employers use such agreements—and the class action waivers contained therein—to mitigate the risks of class and collective actions. The Federal Arbitration Act (FAA) applies to most arbitration agreements and explicitly
Resolving Circuit Split, U.S. Supreme Court Says Courts ‘Shall’ Stay Cases Sent to Arbitration
“Shall” means “shall” in the Federal Arbitration Act (FAA), a unanimous U.S. Supreme Court held in Smith v. Spizzirri, No. 22–1218 (May 16, 2024). The Court explained the language in the FAA providing a court “shall on application of one of the parties stay the trial of the action until [the] arbitration” requires courts to stay, not dismiss, actions subject to valid arbitration agreements.
U.S. Supreme Court Unanimously Holds a Court Has No Discretion to Dismiss a Lawsuit Once It Compels a Case to Arbitration
Executive Summary: On May 16, 2024, the U.S. Supreme Court decided Smith v. Spizzirri, holding that federal district courts have no discretion under Section 3 of the Federal Arbitration Act (“the FAA”) to dismiss a case once the district court has determined that the claims properly belong in arbitration. The decision clarifies a longstanding dispute as to whether a district court must issue a stay pending arbitration or dismiss the case outright.
Supreme Court Rules FAA Requires Courts to Grant Stay Requests After Compelling Arbitration
On May 16, 2024, the Supreme Court of the United States held that when a federal district court determines that claims in a lawsuit are subject to arbitration and a party requests a stay, the Federal Arbitration Act (FAA) requires the court to issue a stay pending arbitration and the
United States Supreme Court Unifies Circuits and Holds That Courts May Not Dismiss Cases Ordered to Arbitration
On May 16, 2024, the Supreme Court of the United States of America (SCOTUS) unanimously concluded
Supreme Court Questions Whether FAA Allows Courts to Dismiss Lawsuits Sent to Arbitration
On April 22, 2024, the Supreme Court of the United States conducted oral arguments in a case addressing federal courts’ handling of lawsuits after claims are compelled to arbitration. The Supreme Court seemed skeptical that dismissing lawsuits without prejudice is truly less burdensome on the court system than simply staying
Ninth Circuit: “Transportation Exemption” Does Not Apply to Arbitration Clauses Between Corporate Entities or in Commercial Contracts
Two days before the United States Supreme Court ruled in Bissonnette v. LePage Bakeries Park St., LLC,1 that the Federal Arbitration Act’s (FAA) transportation worker exemption (meaning the FAA would not apply) extends beyond the transportation industry, the U.S. Court of Appeals for the Ninth Circuit addressed whether the exemption applies
Ninth Circuit Holds Warehouse Worker Qualifies as Transportation Worker Under FAA Exemption
Arbitration agreements with warehouse workers and others who play a “direct and necessary role” in the transportation of goods and people may fall within the “transportation worker exemption” to the Federal Arbitration Act (FAA), the U.S. Court of Appeals for the Ninth Circuit held. Ortiz v. Randstad Inhouse Services, LLC, No. 23-55147 (Mar. 12, 2024).
Arbitration Agreements: Overview and Recent Developments
Arbitration provides employers with an alternative venue to resolve disputes instead of litigation. Similar to litigation, a claimant files a claim and the parties resolve the dispute with a binding decision.
Ninth Circuit Again Rules Last-Leg Delivery Drivers Covered by FAA Interstate Commerce Exemption
On July 21, 2023, the U.S. Court of Appeals for the Ninth Circuit kept in place a ruling that local delivery drivers who made deliveries completely inside California are still engaged in interstate commerce and exempt from the Federal Arbitration Act (FAA).
Third Circuit Rejects Mandatory Arbitration Clause in ESOP
The Third Circuit refused to enforce a mandatory arbitration clause with a class action waiver in an ESOP, finding that the class action waiver deprived participants of statutory rights. The ESOP plan added the clause at issue in 2017. When plaintiffs filed a putative class action in 2019 asserting
U.S. Supreme Court: Federal Courts Must Stay Proceedings During Appeal of Arbitration Denial
The U.S. Supreme Court held that when a district court denies a motion to compel arbitration under the Federal Arbitration Act (FAA), the court must stay its proceedings while that appeal is pending. Coinbase, Inc. v. Bielski, No. 22-105 (June 23, 2023).