SCOTUS Unanimous: Last Mile Exempt §1 FAA

Last week, the U.S. Supreme Court issued a decision in Flowers Foods, Inc. v. Brock, U.S. Sup. Ct. No. 24-935, 608 U.S. ___ (May 28, 2026) regarding the Federal Arbitration Act (FAA) and the question of whether someone can qualify as a worker under the §1 exemption if they never cross state lines and never interact with vehicles that do. Typically, the FAA requires courts to enforce many private arbitration agreements, but it also provides that “nothing” in the law shall be used to compel arbitration in disputes involving the “contracts of employment” of any class of workers “engaged in . . . interstate commerce.” 9 U.S.C. §1. The Supreme Court’s latest decision eliminates one of the many arguments that have been raised to counteract the interstate arbitration exemption under the FAA. In recent years, SCOTUS addressed the scope of §1’s exemption no fewer than three times. In each case, they rejected efforts to cabin its reach. First, in New Prime Inc. v. Oliveira, 586 U.S. 105 (2019), they held that the “contracts of employment” §1 embraces include contracts governing independent contractors, not just employees. Then, in Southwest Airlines Co. v. Saxon, 596 U.S. 450 (2022), they held an airline worker who loaded and unloaded cargo fit within §1’s exemption, even though she did not fly planes or otherwise cross state lines. Finally, in Bissonnette v. LePage Bakeries Park St., LLC, 601 U.S. 246, 249 (2024), they held that a worker can fall under §1 whether employed in the “transportation industry” or some other, so long as their work “play[s] a direct and necessary role in the free flow of goods across borders.” In the instant mattter, they clarified that independent contractors and employees that make “last mile” deliveries as part of a “continuous journey” of goods from one state to another are exempt from arbitration under §1 of the FAA covering interstate transportation workers, even if all of the distributor’s services are intrastate. The Court stated such workers “can sometimes be direct, necessary, and active participants in moving goods ‘from … points in one state’ to ‘points in another state’ without crossing state lines or interacting with vehicles that do.” See more here-- https://tinyurl.com/52rvabua and https://tinyurl.com/mj39rvtf

Comments to Civil Rules Proposals on Mediation & Arbitration Due 5/1

The Florida Bar’s Civil Procedure Rules Committee submitted a couple of proposals to the Florida Supreme Court including amendments likely to simplify important rules concerning mediation and arbitration. First, regarding referral of cases under Florida Rule of Civil Procedure 1.700 (Rules Common to Mediation and Arbitration), a judge may enter an order referring all or any part of a case to mediation or arbitration, unless prohibited by law. The parties to any case may agree to mediate or arbitrate any issue at any time. Except as provided in this rule, mediation and arbitration must be conducted in person. This is the new default, even though well over 90% of cases are resolved online since Covid. The judge may order, or the parties may stipulate, that the mediation or arbitration may be conducted through the use of communication technology. To be clear, communication technology must include both audio and video unless all parties stipulate or the judge finds cause. This seems to be due to the fact that many parties of late claim they don't have functioning cameras and some insurance adjusters appear with black screens on Zoom. The proposed amendments would essentially require a mediation or arbitration via remote technology must include both audio and video-- i.e., fully appearing online at the proceeding. In addition, the Civil Rules Committee is proposing amendments to Florida Rule of Civil Procedure 1.820 (Hearing Procedures for Non-Binding Arbitration). The new language would, among other things, require an arbitrator to file with a court a notice of service of the arbitration decision, but not the actual arbitration decision itself. This might eliminate filing under seal which can be difficult for neutrals, depending on the clerk procedures in each county. The party entitled to a judgment if no request for trial de novo is made, or after a trial de novo is conducted, would be required to file the arbitration decision with the court. The proposed amendments would also require that a party file only a written request for trial to reject an arbitrator’s decision, and that a timely request for trial “be construed so as to do substantial justice.” Members of the Committee now agree that it is duplicative and unnecessary for a party to say both that the arbitration award is being deemed rejected and that a trial de novo is being requested. Rather, it is implicit that a request for a trial de novo is a rejection of the arbitration award. See more here-- In Re: Amendments to Florida Rule of Civil Procedure 1.820, Case No. SC2026-0040 and In Re: Amendments to Florida Rule of Civil Procedure 1.700, Case No. SC2025-2041 https://acis.flcourts.gov/portal/search/case

ADR Section St. Pete Retreat

Please join fellow members of the Alternative Dispute Resolution Section of The Florida Bar later this month in beautiful St. Pete at the Hyatt Place–St. Petersburg-Downtown for their annual retreat weekend. This active section which includes certified civil and family mediators, qualified arbitrators and other attorneys looking to learn more about being effective utilizing ADR processes is now celebrating its fifteenth year! I have been honored to serve as an emeritus member of the Executive Council after serving two terms. This is a great opportunity to become more involved in the leadership of the profession and to help guide processes such as important rulemaking at the state level. The tentative schedule for the program is as follows: Friday, August 22, 2025: Happy Hour at Hyatt Place (4:00 p.m. -6:00 p.m.) Dinner at Oak and Stone (following Happy Hour) Saturday, August 23, 2025: CLE/CME Presentations at Hyatt Place (9:00 a.m. -11:00 a.m.) Lunch Provided at Hyatt Place (12:00 p.m. – 1:00 p.m.) Executive Council Meeting (1:00 p.m. – 4:00 p.m.) Off-Site Dinner and/or Team Event (TBD) This year's event will include some focus on the evolution of Nonbinding Arbitration in Florida that is increasingly being employed by many circuits to cull the court dockets still backlogged from the pandemic. Special rate room block booking cutoff is August 11th. More information here-- https://flabaradr.com/events/the-adr-section-annual-retreat/ Sign form up here-- https://tinyurl.com/ecbk94zf

Did The Mouse Give Arb a Black Eye?

Recent stories of a wrongful death case that Disney sought to arbitrate through a clickwrap-type agreement from its streaming service have caused an uproar. After a media frenzy, Disney relented yesterday, waiving arbitration and stating: "'We strive to put humanity above all other considerations. With such unique circumstances as the ones in this case, we believe this situation warrants a sensitive approach to expedite a resolution for the family who have experienced such a painful loss.'” Though Disney has withdrawn its motion to arbitrate and will proceed in Orange County Circuit Court, those legal clauses still exist across Disney’s platforms, including on its streaming services and park entrance tickets. For instance, when you create a Disney+ or ESPN+ account, you also agree to the Walt Disney Company’s Terms of Use that include waiving a jury trial. Disney said it was defending against the attempt to include them in the lawsuit against a restaurant, an Irish pub inside Disney Springs where the decedent dined, at the shopping complex Disney leases to other companies. The lawsuit alleges it was billed on Disney’s website as having allergen free food and that the waiter then “'guaranteed'” that the food was allergen-free. The patron, a physician, later died from anaphylaxis, even after self-administering an EpiPen. Arbitration was sought based on an older Disney+ subscription, as well as use of the company's website in 2023 to buy theme park tickets. These headlines, combined with the recent controversy over Olympic gymnastics medals, seemingly gives pause to those that would otherwise utilize an ADR process that often leads to faster outcomes with less associated costs and finality in deciding disputes. See more here-- https://tinyurl.com/35dva36a and https://tinyurl.com/nhkbkrrm and https://shorturl.at/6qU3C (image via Deviant Art)

FL Non-Binding Arb Rule Changes Effective 7/1

The Supreme Court of Florida accepted most of the Florida Bar Civil Rules Committee’s proposal to amend Rule of Procedure 1.820 regarding the Non-Binding Arbitration process, though rejected requiring that an arbitration decision be served on the parties, but not filed with the court. The Committee proposed this change because the move to electronic filing made rule 1.820(g)(3)’s requirement to file an arbitrator’s decision under seal unworkable, as it is difficult to shield certain parts of an electronic case file from review by the presiding judge. Though they agreed the rule needs to be amended to better align with existing electronic filing practices, they believe an arbitrator’s decision needs to be filed with the court after the arbitration process has concluded to avoid unnecessary confusion and to ensure that the court can timely act on the decision under rule 1.820(h) if no request for trial de novo is made. Still, the court might revisit this matter and suggested a possible solution may be to simply require arbitrators to use a coversheet when filing their decisions with the court reminding the presiding judge not to review the decision-- unless no request for trial de novo is made in accordance with Section 44.103(5), Florida Statutes (2023). As for the changes going into effect this summer, Rule 1.820(h) is now retitled “Notice of Rejection of the Arbitration Decision and Request for Trial” and clarifies the process for rejecting an arbitrator’s decision and requesting a trial de novo. Under the amended rule, an arbitration decision will be deemed rejected only if such notice is filed with the court within 20 days of service of the arbitrator’s written decision. See more here-- Fla. S. Ct. Case number SC2022-1719 https://tinyurl.com/5c5wbttn

Florida Arbitrator Rule Comments Due 6/4!

The Supreme Court of Florida's Committee on Alternative Dispute Resolution Rules and Policy has filed a petition with the Florida Supreme Court to amend the qualifications for court-appointed arbitrators to clarify the language of Rule 11.010, Florida Rules for Court Appointed Arbitrators, entitled Qualification, which provides the requirements for qualification as a non-binding arbitrator. Apparently, the impetus is that the current rule is internally contradictory, or at best confusing. The first sentence basically nullifies itself– “Arbitrators shall be members of The Florida Bar, except where otherwise agreed by the parties.” So, the parties can decide an arbitrator is anyone off the street despite the first clause in the sentence requiring them to be members of The Florida Bar. The second sentence of the current rule is vague or ambiguous. It says, “The chief arbitrator shall have been a member of The Florida Bar for at least five years” with no reference to good standing or whether the “five years” are immediately preceding or even consecutive. The third and final sentence then says, “Individuals who are not members of The Florida Bar may serve as arbitrators only on an arbitration panel and then only upon the written agreement of all parties.” By its terms, this sentence limits the seemingly absolute ”where otherwise agreed by the parties” in the first sentence of the rule and allows individuals who are not members of The Florida Bar to serve as arbitrators only on panels even “where otherwise agreed by the parties [from the first sentence].” Some members of the Arbitration Committee of the Alternative Dispute Resolution Section of The Florida Bar are considering a comment with concern for out of state lawyers. The proposed rule only adds permission for them to be the chief or sole arbirator “if agreed to by the parties.” Otherwise, they have the same opportunity to be arbitrators as under the first sentence of the current rule. The new language purports to maintain the protection of the qualification requirement for arbitrators, but allows the parties to continue to select arbitrators from a broad field. The petition is styled In Re: Amendments to the Florida Rules for Court-Appointed Arbitrators, and the court has assigned case number SC2024-0442. The court has announced a public comment period through June 4, 2024. See more here-- https://tinyurl.com/2p9mcx8r and https://tinyurl.com/bdhc43c4

Orlando Mediator Top 5

Since 2010, upon my becoming a full-time neutral, I have tried to bring awareness to our little corner of the world in Alternative Dispute Resolution (ADR) through blogging about mediation and arbitration online. Once again, the Orlando Mediator blog received the honor of being named in the top five and moved up to fourth among Alternative Dispute Resolution blogs out of sixty ranked on the web by traffic, social media followers, domain authority and freshness. I'm certainly in some good company on this list with established dispute resolution blogs around the world that actually have professional writers. Orlando Mediator is recognized by Feedspot among the best, including such distinguished blogs published by big names like Kluwer and even above those by prominent ADR organizations like the American Arbitration Association (AAA), The Chartered Institute of Arbitrators (Ciarb) and International Institute for Conflict Prevention & Resolution (CPR). Feedspot's experts chose Orlando Mediator as number four in the world for what their founder calls the most comprehensive list of Dispute Resolution Blogs on the planet! Feedspot says it is the internet’s largest human curated database of bloggers and podcasts. Their list combines RSS feeds allowing users to keep track of many different websites in a single news aggregator. I am humbled to know this labor of love for my chosen field is appreciated. I do enjoy keeping everyone informed on the latest trends and happenings in mediation and related fields through this outlet. Thanks again for your readership and support over the years! The full list is available here-- https://legal.feedspot.com/dispute_resolution_blogs/ and https://rss.feedspot.com/dispute_resolution_rss_feeds/

My Pillow CEO Faces Confirmation of Award

MyPillow CEO Mike Lindell offered to pay $5 million to anyone who could debunk his evidence of interference in the 2020 presidential election. A vocal supporter of the former President, Lindell believed that the 2020 election was stolen, and that he had the evidence to prove it. There was a catch, however, as Lindell required that any such claims be submitted to an arbitrator, and the terms were written quite narrowly–but perhaps not narrowly enough. A computer forensics expert who had apparently voted for Trump twice, took Lindell up on his challenge. He analyzed the supposed evidence and demonstrated there was nothing of any sort of election interference. Lindell's terms required that he show the data had nothing to do with the 2020 presidential election. When Lindell refused to pay, the matter went to arbitration. There, despite Lindell having written the terms to make recovery difficult, the arbitrators sided with the forensic expert, Robert Zeidman, who has now filed in federal court. According to Case Western Reserve University School of Law Professor Jonathan Adler, Lindell may not have learned much about election administration through these travails, but it appears he is about to learn something about the enforceability of arbitration awards. Reportedly, Lindell is also facing multiple defamation suits from Dominion Voting Systems and former Dominion executives, and has been hit with legal sanctions for frivolous legal claims. See more here-- https://tinyurl.com/s4vr4rd2

Arb Going Back To Cali

The U.S. Court of Appeals for the Ninth Circuit recently blocked a California law that prohibited employers from requiring their workers to resolve legal disputes in private arbitration, ruling that it conflicts with federal law. A panel affirmed the district court’s grant of a preliminary injunction barring enforcement of California’s Assembly Bill (AB) 51 with respect to arbitration agreements governed by the Federal Arbitration Act (FAA). Since 2020, California was first to ban mandatory arbitration of all employment-related disputes in the wake of the #MeToo movement. New York and New Jersey similarly passed laws prohibiting mandatory arbitration of sexual harassment and discrimination claims, but California's statute was much broader. Employers were prohibited from requiring individuals to sign as a condition of employment or employment-related benefits arbitration agreements concerning disputes arising under the California Fair Employment and Housing Act or Labor Code. In affirming the district court’s grant of a preliminary injunction, a majority of the Ninth Circuit panel used U.S. Supreme Court precedent that states rules burdening the formation of arbitration agreements are an obstacle to legislative intent of and preempted by the FAA. The court also noted the U.S. Court of Appeals for the First and Fourth Circuits reached similar conclusions when confronted with state laws that attempted to prevent parties from entering arbitration agreements. The court rejected arguments from the State of California that it should sever clauses that were deemed preempted by the FAA and leave the remainder of the law intact. The court found AB 51 could not be dissected as the statute’s provisions all work together to burden the formation of arbitration agreements and there was no authority in the legislation to sever the penalty portions of the law. If the State of California does not get a rehearing en banc or pursue further appeal, the matter will return to the district court to proceed for a final determination on the legality of AB 51. See reporting here-- https://bit.ly/3ZtxpoU and https://tinyurl.com/mvvfn6um and latest decision here-- https://tinyurl.com/54u4jukp

Valentine's date? Arb Forum 2/14

Join us for the Alternative Dispute Resolution (ADR) Section of the Florida Bar's next Arbitrator's Forum on February 14, 2023 at 8 am EST live on Zoom. Invite a fellow arbitrator or litigator to this complimentary event on Valentine's Day as we speak to statewide practitioners about their preferences and practices. This month, we will discuss “What Arbitrators Need To Know About Remedies, Attorney's Fees, Punitive Damages, and More!” The Florida Bar ADR Section's standing Arbitration Committee instituted the forum series last year to create a community of better informed arbitration neutrals in our state. We listen and learn from each other by talking through common arbitration challenges and how they might be better resolved. Our discussion is frank and encourages participation by all. Please also consider becoming an official ADR Section member as lawyers from those practice areas dealing with arbitration join their full-time neutrals colleagues to discuss what works, what confounds, and how to improve skills in this growing field. See more here-- bit.ly/ADR_ArbForum_6

No Prime Day For Amazon and Arbitration

The U.S. Supreme Court decided today not to consider whether drivers for Amazon’s Flex delivery service are interstate transportation workers who can avoid arbitration as part of a proposed class claim. Amazon.com Inc. had urged the high Court to review a federal appellate decision allowing a Flex driver to avoid arbitrating proposed class claims that he and others are misclassified as independent contractors because they’re interstate transportation workers exempt from the Federal Arbitration Act (FAA). The First Circuit Court of Appeals held last summer that those workers making local deliveries to Amazon customers qualify for the FAA exemption, even though they don’t cross state lines, because their work involves transporting goods in the flow of interstate commerce. Flex drivers, therefore, aren’t bound by arbitration agreements that would prevent them from litigating their state law wage claims. In recent years, Amazon used independent contractors to deliver goods through its Flex smartphone app. Flex contractors could sign up for shifts and use their own car while adhering to Amazon’s standards to deliver packages. However, if a contractor takes longer than their shift to complete their deliveries, they are not compensated for extra time, nor reimbursed for gas, vehicle maintenance, or cell phone data costs for the job. Working with Flex, an individual agrees to its terms of service, which requires settling disputes through arbitration governed by the FAA. Interestingly, earlier this month, the company changed its terms allowing people to bring individual or class action lawsuits against it. Amazon made the change in response to more than 75,000 pending arbitration demands on behalf of its Echo device users that would have required it to ante up tens of millions of dollars in filing fees in those cases. It now faces several class actions, including one alleging that it improperly recorded and preserved conversations through its Echo Dot Kids devices. See more here-- https://bit.ly/3vRYhzW and https://bit.ly/3qgc95x and https://bit.ly/2SKw54w

Mandatory Non-Binding Arbitration Now Available

A new Administrative Order in Ninth Judicial Circuit Court of Florida now permits a presiding circuit or county court judge to refer civil cases to non-binding arbitration without the consent of the parties, much like cases are referred to mediation. This is the first time in our local courts that such a dispute resolution mechanism, other than mediation, is available for the judicial officer to resolve backlogged cases due to Covid-19 court closures. The development is expected, as other jurisdictions have demonstrated success in culling dockets with this technique. Though some counsel and their clients have expressed disdain for the process, which can be more like a mini-trial, others have found it useful in getting to the heart of the dispute. Per the order, the non-binding arbitration hearing shall be conducted informally with a decision within ten days of the final adjournment. Presentation of testimony shall be kept to a minimum and other matters shall be presented primarily through the statements and arguments of counsel. Arbitration fees shall be equally divided between the parties, unless otherwise agreed by the parties or ordered by the court. The arbitrator or chief arbitrator shall determine the hearing procedures in advance of the hearing, including what live testimony, if any, will be permitted and the nature, scope, and duration which will be set forth in the Notice of Non-binding Arbitration Hearing. When a case is referred to non-binding arbitration the parties shall have fifteen days within which to agree on the number and selection of their own arbitrator(s); otherwise, the presiding judge shall determine the number of arbitrators and select them. See more here-- https://bit.ly/3oD0QlS

Rare Florida Case Addresses Arbitrability

This year, a Florida district court of appeal chose to delve into what they saw as a "rather arcane" issue in arbitration of who decides whether a dispute is subject to a contract's arbitration provision: an arbitrator or a judge? There are many recent decisions from around the country deferring to the arbitrator. However, the majority explains the contract's provision in this case did not provide clear and unmistakable evidence that only the arbitrator could decide the issue of arbitrability. Unbeknownst to the renter of an Airbnb, the host had installed hidden cameras throughout the unit. Plaintiff alleged that Defendant secretly recorded the entire stay in the unit. For this violation of privacy, a lawsuit was filed in state court. Airbnb then filed a motion to compel arbitration. Airbnb argued the claims were subject to arbitration through Airbnb's Terms of Service, under which the renter agreed to be bound to pursuant to a "clickwrap" agreement. The arbitration provision contained fairly standard language such as "You acknowledge and agree that you and Airbnb are each waiving the right to a trial by jury." The court held that the clickwrap agreement's arbitration provision and the AAA rule it referenced that addresses an arbitrator's authority to decide arbitrability did not, in themselves, arise to "clear and unmistakable" evidence that the parties intended to remove the court's presumed authority to decide such questions. The evidence on what these parties may have agreed to about the "who decides" arbitrability question was considered ambiguous. Therefore, the trial court retained its presumed authority to decide the arbitrability dispute. A conflict with decisions from other districts was certified. See full opinion here-- https://tinyurl.com/y4oyxsgv

Dash for Arbitration

DoorDash delivery workers filed thousands of individual claims at once as initial fees approach $12 million for the company. Under District Judge William Alsup’s order this week in Abernathy v. DoorDash pending in the Northern District of California, DoorDash must arbitrate over 5,000 individual disputes with various workers who claim that they were misclassified as independent contractors, when they should be treated as employees. It also must pay a $1,900 fee for each of these individual arbitration proceedings. As with other gig economy platforms, DoorDash includes an arbitration agreement in its contracts with couriers, who deliver food orders. But after facing a flood of claims, DoorDash balked at the costs of going into arbitration administered by the American Arbitration Association (AAA) where couriers themselves paid more than $1.2 million in filing fees. After Uber imposed arbitration and a class action ban, more than 60,000 of those drivers sought to arbitrate claims against the company. Faced with legal costs of at least $600 million, Uber settled the a majority of these claims last spring. Could the same happen in this case? Another California federal judge similarly compelled arbitration in a case with thousands of claims against Postmates, asking the attorneys to explain how the company’s refusal to pay arbitration fees didn’t amount to contempt. A ruling is pending on that issue. DoorDash had asked to suspend the court proceedings until the approval of a settlement could be reached in a separate class-action case, given the potential for overlap. The company reportedly stands ready and willing to defend legitimate arbitration demands, but maintains it should only be responsible for arbitrating legitimate claims. See more here-- https://bit.ly/39uUehT and https://bit.ly/38qRDWa and https://bit.ly/2OSRQcW

Judge Blocks CA Arb Ban

Today, there's a hearing on a Temporary Restraining Order (TRO) against the State of California where a federal district judge is blocking implementation of the state’s new ban on arbitration of cases involving sexual harassment. The court will hear a request by the California Chamber of Commerce and other business groups for a preliminary injunction. This is a big test that will have national impact. The ban was signed into law in October 2019. It prohibits California employers from requiring employees to waive any right to or opt out of any legal forum or procedure established by the California Fair Employment or Labor Code. The new law applies to contracts for employment entered into, modified or extended on or after January 1, 2020-- the effective date of the new law. If an employer violates the act by forcing arbitration, they would commit a misdemeanor. The National Retail Federation filed suit in federal court seeking to prevent the law from going into effect by arguing the Federal Arbitration Act (FAA) and recent U.S. Supreme Court cases created a federal policy of using arbitration as a legitimate alternative to court litigation. Further, the FAA preempts state law to the contrary. A final ruling regarding primacy of the FAA over state law will serve as a bellwether on employer use of arbitration and may thwart other states from passing similar laws. See more here-- https://bit.ly/2R1oWrz and https://bit.ly/2RafHWa UPDATE: Following oral argument during which recent SCOTUS cases involving the FAA such as Epic Systems and Kindred Nursing were cited, the court requested supplemental briefing regarding the state's suggestion that the court lacks jurisdiction. The TRO will remain in effect until January 31, 2020.

Class Arbitration Attacked Again

Recent rulings from the U.S. Supreme Court have supported the underlying concept codified in the Federal Arbitration Act (FAA), but have demanded clarity in the drafting of agreements seeking implementation of an arbitration process through which to dispose of disputes. Recently, in Lamps Plus, Inc. v. Varela, the Court found neither silence nor ambiguity in an arbitration agreement regarding the permissibility of class arbitration enables a court to find that the parties agreed to permit class arbitration. According to the Court, consent is fundamental to arbitration. Arbitration agreements must be express and unambiguous because it would so drastically alter the nature of the proceeding from the simple bilateral process that was envisioned in the FAA. Rules of ADR organizations such as JAMS or AAA incorporated by reference into the agreement that contain ancillary rules under which arbitrators could conduct class proceedings had no effect on the Court’s decision. This implies that mere incorporation of other procedural rules is not a sufficient basis to infer an agreement to permit class arbitration either. The Court emphasized that class arbitration proceedings are fundamentally different in nature from bilateral arbitrations envisioned by the FAA. Class arbitrations sacrifice the informality of the contemplated bilateral process, as well as its speed, simplicity, and relative inexpensiveness, and instead produce a slower, more costly, and more complex process that looks like “the litigation it was meant to displace." See full analysis here-- https://bit.ly/2HlFvdW and opinion here-- https://bit.ly/2GvzOZm

SCOTUS - Second Unanimous Arbitration Opinion

This month, the Supreme Court of the United States handed down its second unanimous opinion on arbitration. In New Prime Inc. v. Oliveira, which arose out of an employment dispute between a trucking company and driver, the Court found while the Federal Arbitration Act (FAA) authorizes a court to compel arbitration if parties agreed to arbitrate, the statute also defines the agreements to which it applies. Before a court enforces an agreement to arbitrate, it must first ensure the agreement is one the FAA authorizes courts to enforce. Specifically at issue was whether an exception to the rule in the FAA that obligates courts to enforce arbitration agreements that involve interstate commerce applied. Section I of the FAA exempts contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce from arbitration. The opinion explains while a private agreement may be crystal clear and require arbitration of every question under the sun, that does not necessarily mean the FAA authorizes courts to stay litigation and send the parties to an arbitral forum. In this instance, companies engaged in interstate or foreign transportation should take notice that a trucker’s status as an independent contractor no longer protects the company’s arbitration agreement with him or her under the FAA. Interestingly, despite a conservative majority, the justices chose to interpret the FAA in a way that likely expands worker’s rights. Justice Gorsuch, who authored the opinion, did not deny the vigor of the court’s embrace of a liberal federal policy favoring arbitration agreements. However, in this case, the text seemed clear enough to persuade all of the justices to reject the claim for arbitration. See commentaries here-- https://bit.ly/2Gdqhb2 and https://bit.ly/2CvAxro and opinion here-- https://bit.ly/2CyEpbd

More Arbitration Argument Before SCOTUS

Today, the U.S. Supreme Court (SCOTUS) has oral arguments in two arbitration cases. In the first matter, Henry Schein, Inc. v. Archer & White Sales, Inc., the justices consider if a judge or an arbitrator should decide if a particular dispute should be resolved in arbitration rather than in court. In the second case, Lamps Plus Inc. v. Varela, the issue is whether the Federal Arbitration Act (FAA) precludes state law interpretation of arbitration contracts allowing for class arbitration and who decides whether a particular dispute should be decided in arbitration rather than a court. SCOTUS has already recognized that arbitrators decide issues of arbitrability if the parties clearly and unmistakably agree the arbitrator can assess whether any particular dispute is sufficiently related to the contract to warrant arbitration. Apparently, the U.S. Court of Appeals for the 5th Circuit will not send a case to the arbitrator decide the question of arbitrability, even if the parties have agreed that the arbitrator should decide such questions, if the court finds the claim of arbitrability wholly groundless. The contract in the first case mentioned above provided for arbitration of any dispute arising under or related to the contract, except for actions seeking injunctive relief. The complaint sought damages for Sherman Act violations, as well as injunctive relief. The defendants sought arbitration, arguing the thrust of the complaint was to seek damages, and that injunctive relief could issue after the arbitrator ruled on the merits. Lower courts refused to send the matter to arbitration, finding the request for arbitration groundless because of the inclusion in the complaint of a count for injunctive relief. Because SCOTUS already decided parties can delegate issues of arbitrability to an arbitrator in precedents that do not include exceptions for cases in which courts regard the request for arbitration as groundless, a reversal is likely given recent trends in favor of arbitration. The second case hinges on whether the U.S. Court of Appeals for the 9th Circuit correctly held that an employer did consent to class arbitration when it included language in the arbitration contract that committed the parties to use arbitration in lieu of any and all lawsuits or other civil legal proceedings. This case too may find itself going back, but on procedural grounds as the FAA dictates that an appeal may not be taken from an interlocutory order directing arbitration to proceed. See more here-- https://bit.ly/2AzcN6e and https://bit.ly/2JodgdX and https://bit.ly/2w5K2O8

Arbitrator to Decide Trump Campaign Staffer Claim

Earlier this month, a New York Supreme Court judge decided a former campaign staffer‘s lawsuit regarding harassment could not be moved to private arbitration because her NDA didn’t specify that. Rather, it was merely an option and contained nothing about her job responsibilities, terms of her employment, salary, benefits, or her ability to pursue her own claim. Per the ruling, the state court observed the arbitration clause confined arbitration to "any dispute arising under or relating to this agreement." The state judge also decided it did not require arbitration for any "dispute between the parties" or even "any dispute arising out of plaintiff’s employment." In fact, the court did recognize an arbitrator's province in determining arbitrability, but said is was not even close call and was so clear on this specific, narrow clause as to be a question for the courts alone. Now, however, an arbitrator should have the first stab at deciding over the validity of an arbitration agreement according to a U.S. District in the Southern District of New York who ruled yesterday in a decision that appears to run counter to the state case. The new federal decision is reportedly in accordance with the prior state ruling, as it suggests that each turned on different wording of the separate complaints filed in the respective courts. The latest federal decision is certain to be presented as strong support for the appeal Trump’s legal team plans to file at the state court level. The employee sought to have the arbitration agreement declared unenforceable, saying it had been “weaponized” against her by the campaign. In his opinion and order, the federal judge said the terms of the NDA agreement she signed demands that her very argument about the agreement’s unenforceability must be determined by an arbitrator. The language of the arbitration states that any dispute "arising under or relating to" the agreement was subjected to the rules for commercial arbitration of the American Arbitration Association. Those rules state that the arbitrator has the power to rule on issues of his or her own jurisdiction, including the validity of the agreement itself. Interestingly, in noting the prior ruling at the state level, and specifically that the federal court was in no way bound by it, the judge quoted the state court critique of the language of the agreement failing to require any claims needing to be sent to arbitration, rather than any dispute under or related to the agreement. "Instead, the clause is much narrower: it allows defendant to choose whether to arbitrate any dispute that arises out of the agreement." In this, the federal judge found the claimant raised a "dispute that arises out of the agreement" --whether the agreement is enforceable, and further finding it follows that,"even on the state-court’s view of the arbitration clause, this dispute falls with the clause’s scope." As such, the federal case was dismissed, with neither party requesting to stay the case pending arbitration. See full story here-- https://bit.ly/2PTAHPh

State Judge: Arbitration not required by Trump NDA

Last week, former White House official Omarosa Manigault Newman made the rounds on national news shows about her new book and her firing which raised the question of whether she violated a signed a non-disclosure agreement (NDA) regarding her time in the Trump Administration. Meanwhile, an order in a New York lawsuit brought by another staffer during the campaign points to how Trump's future motion to compel arbitration claims may be decided. A state judge ruled Friday that another former campaign staffer‘s lawsuit regarding harassment could not be moved to private arbitration because her NDA didn’t specify that. Rather, it was merely an option and contained nothing about her job responsibilities, terms of her employment, salary, benefits, or her ability to pursue her own claim. Per the ruling, the court observed the arbitration clause confined arbitration to "any dispute arising under or relating to this agreement." The judge also decided it did not require arbitration for "any dispute between the parties" or even "any dispute arising out of plaintiff’s employment." Interestingly, the court did recognize an arbitrator's province in determining arbitrability, but said is was not even close call and was so clear on this specific, narrow clause as to be a question for the courts alone. Reportedly, Manigault Newman claims President Donald Trump is trying to silence her after his campaign filed an arbitration, claiming she violated her own non-disclosure agreement. See full news stories here-- https://bit.ly/2wgkYAT and https://usat.ly/2Bf3Cdu and court order here-- https://bit.ly/2Mna1IC