U.S. Supreme Court to Hear a Case on Arbitration Agreements
The United States Supreme Court has agreed to hear a case regarding the arbitrability of race discrimination and retaliatory termination claims made by an employee who has alleged the arbitration agreement with his employer was unconscionable.
Gavin Craig, Minnesota attorney and publisher of Twin Cities Business Litigation Blog, warns about courts rewriting contracts.
“This is an odd case. If you accept the premise that the arbitration Agreement is a contract, and that the parties are bound by their contracts, the Ninth Circuit is wrong. The court is essentially re-writing the contract and deleting a provision. That is not right. Courts are not supposed to rewrite contracts. But that is the effect of the Ninth Circuit ruling. (pdf)"
The United States Supreme Court will now be deciding if a district court is required to determine the unconscionability of an arbitration agreement, even when the parties to the agreement have clearly and unmistakenly assigned this “gateway” issue to the arbitrator for decision?
The U.S. Supreme Court’s decision may have a far reaching impact on arbitration agreements between employers and employees, but for now we will have to wait and see.
