Court Rules on Enforcement of Arbitration Agreements

This April, the Supreme Court heard arguments on the issue of who should decide claims as to the unenforceability of an agreement to arbitrate the enforceability of an arbitration agreement--an arbitrator or a court. The high court delivered its opinion June 21 and in doing so established guidance for where such claims belong.

"The court has been quite pro-arbitration; they really want to enforce arbitration agreements," says Tom Goldstein, co-leader of Akin Gump's litigation management committee and the publisher of SCOTUSblog. "But the theory of the decision is a little surprising because it is an argument that no one else had made in the case. The majority came up with its own theory that is kind of a middle ground, and it's not clear how broadly it will apply. ... Rent-A-Center is definitely going to have some follow-up cases."

Breezy Assertion

For example, the financial services reform bill that Congress passed this year included limitations on arbitration agreements in consumer financial service contracts.

"It doesn't include employment agreements like this, but it's a pretty big world--all your credit card and bank agreements, anything like that," Harvey says. "Not only that, but if someone said arbitration clauses were unfair, like if the Bureau of Consumer Financial Protection outlawed them in the consumer context, that might turn out to be the end of arbitration clauses all around, outside of the commercial context."

Associate Editor

Melissa Maleske

Bio and more articles

Join the Conversation

Advertisement. Closing in 15 seconds.