The United States Supreme Court recently ruled on an arbitration agreement issue in the employment context. Rent-A-Center, West, Inc. v. Jackson, No. 09-497, __ U.S. __ (June 21, 2010), available at http://www.supremecourt.gov/opinions/09pdf/09-497.pdf.
Jackson sued Rent-A-Center for employment discrimination. Rent-A-Center filed a motion to compel arbitration. The district court granted Rent-A-Center’s motion. On appeal to the Ninth Circuit Court of Appeals, the appellate court reversed on the question of whether the court or the arbitrator had the authority to decide whether the arbitration agreement was enforceable. Rent-A-Center appealed.
The United States Supreme Court’s ruling applies to arbitration agreements that are both subject to the Federal Arbitration Act and that include a specific agreement that an arbitrator shall determine the enforceability of the agreement: If a party specifically challenges the enforceability of that particular clause, then a court may consider the challenge; however, if a party challenges the enforceability of the agreement as a whole, an arbitrator must consider the issue. Here, because Jackson challenged the enforceability of the entire agreement, an arbitrator must determine the issue. The Court reversed the judgment of the lower court.
For more information about arbitration agreements in the employment context, contact Dallas employment arbitrator Keith Clouse at Clouse Dunn Khoshbin LLP at [email protected].
