Supreme Court class arbitration case could have big implications for employers

High court will decide whether arbitrator exceeded authority by allowing class procedure

Yesterday, the Supreme Court heard arguments in a case that could have a big impact on employment law.

In Oxford Health Plans v. John Sutter, a doctor sued Oxford Health Plans in state court on behalf of a proposed class of physicians who claimed the health insurer underpaid them. Oxford moved the case into arbitration per a contract to which the physicians had agreed. The arbitrator ruled that the physicians could pursue arbitration against Oxford as a class, even though the contract’s arbitration clause didn’t address class arbitration. A trial court and the 3rd Circuit both affirmed the ruling. The case went to the Supreme Court, which heard arguments yesterday.

Employment lawyers are closely watching the case, as it could have implications for employers. “If the court rules that the arbitrator had exceeded his authority by allowing a class procedure, it would be quite logical that the same principle would apply to employment arbitrations,” Seyfarth Shaw Partner Richard Alfred told Thomson Reuters.

Various groups, including the Chamber of Commerce, the Equal Employment Advisory Committee and the Voice of the Defense Bar, filed amicus briefs in support of Oxford. They say the benefits of arbitration could disappear if the high court rules for the plaintiffs.

“If plaintiffs’ lawyers figure out they could pursue a class arbitration, employers could be more liable more often (and) arbitration could be less cheap,” Saint Louis University School of Law Professor Marcia McCormick told Thomson Reuters. “I think [employers] are worried about plaintiffs figuring out this is an option and taking advantage of it.”

For more recent InsideCounsel articles concerning arbitration, read:

Supreme Court: Oxford Health Plans v. Sutter asks whether parties agree to class arbitration by failing to mention it

Court revives antitrust case against grocers

Litigation: Part 2—20 things to consider when negotiating arbitration provisions

Litigation: Part 1—20 things to consider when negotiating arbitration provisions

Credit card companies go to trial over arbitration agreement

5 things to know about Texas arbitration law

 

Contributing Author

Ashley Post

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