Supreme Court of Texas Holds Company Did Not Waive Right to Arbitration
September 1, 2016

The Supreme Court of Texas has ruled that a company did not waive its right to arbitration by engaging in the litigation process with a third party. In RSL Funding, LLC v. Pippins, No. 14-0457 (Tex., July 1, 2016), a company, RSL Funding, agreed to purchase certain annuity contracts issued by MetLife from three individuals on behalf of the company or its assigns. As part of this agreement, RSL funding and the individuals signed an arbitration agreement. Despite this, neither RSL nor the individuals...

San Antonio COA Holds Payday Lender Did Not Waive Right to Arbitrate When it Filed Criminal Charges Against Customers
August 31, 2016

In a 2-1 decision, Texas’ Fourth Court of Appeals in San Antonio has ruled that a payday loan business did not waive its right to engage in arbitration when the company filed criminal complaints against its defaulting customers.  In Cash Biz, LP v. Henry, No. 04-15-00469-CV (July 27, 2016), a payday lender, Cash Biz, provided short-term loans to individuals.  As part of this process, loan customers provided the company with a post-dated check for the amount of the loan and any applicable service...

Chipping Away at the Enforceability of Class Waivers in Employment Claims
August 31, 2016

For years, California has been in a state of confusion over the validity of class action waivers that require plaintiffs to arbitrate their claims individually. This issue has been particularly volatile in the employment law arena, where workers and employers have taken passionately opposing positions. Adding to the constant confusion has been a long line of related split decisions in various state and federal courts, including some that have involved National Labor Relations Board (NLRB) rulings.   For...

Fifth Circuit Orders FLSA Dispute to Arbitration Based on Delegation Clause in Employer’s Arbitration Policy
August 30, 2016

The nation’s Fifth Circuit Court of Appeals has ruled that a delegation clause stating gateway determinations regarding arbitrability must be decided by an arbitrator applied to an oil worker’s preexisting Fair Labor Standards Act (“FLSA”) claim.  In Kubala. v. Supreme Production Services, Inc., No. 15-41507 (5th Cir., July 20, 2016), a Texas oil field employee, Kubala, brought a proposed FLSA case against his employer, Supreme Production Services (“SPS”).  Before Kubala’s employer...

Third-Party Discovery in Arbitration: Between a Rock and a Hard Place
August 30, 2016

There is no clear path to securing discovery from third parties prior to an arbitration hearing. Indeed, courts are divided on their authority to enforce third-party subpoenas issued in the context of an arbitration proceeding. In jurisdictions where the enforceability of third-party subpoenas is limited or uncertain, parties may have to consider alternatives.   Suppose that your client is engaged in an arbitration pending in Ohio. At your request, the arbitrator issues a third-party subpoena...

Fifth Circuit Again Rejects NLRB’s Position on Class Action Waivers in Arbitral Agreements
August 29, 2016

The United States Court of Appeals for the Fifth Circuit has once again rejected a National Labor Relations Board’s (“NLRB”) order stating a class action waiver included in an agreement to arbitrate violates the National Labor Relations Act (NLRA).  In Citi Trends Inc. v. NLRB, No. 15-60913 (5th Cir. August 10, 2015), a former Citi Trends employee filed an unfair labor-practices charge against the company over the terms included in its mandatory arbitration agreement.  An administrative law judge...

Eleventh Circuit Makes Vacatur Challenges More Difficult
August 29, 2016

So, you think you have a strong case for challenging an unfavorable arbitral award on grounds that the arbitrator was (1) partial, (2) committed misconduct, or (3) exceeded his or her powers? Ponder your decision very carefully because history has shown that overturning an arbitral award on appeal is extremely difficult given that the standards of review under the Federal Arbitration Act (FAA) and analogous statutes are extremely narrow. Under section 10(a) of the FAA, vacatur is appropriate under...

FINRA Reminds Broker-Dealer Firms of Their Duty to Arbitrate
August 25, 2016

Last Friday, FINRA issued Regulatory Notice 16-25 reminding member firms that, under FINRA Rules 12200 and 13200, they have a regulatory duty to arbitrate at the request of a customer (account-related disputes) or an associated person (employment disputes). The Notice cited a number of recent circuit court decisions holding that a forum selection clause in the parties’ agreement superseded FINRA rules.  (In those cases, the broker-dealer was attempting to avoid arbitration at FINRA.)  FINRA disagrees...

Federal Courts Teach Arbitration 101 In Recent Opinions
August 24, 2016

While state courts have been busy articulating novel interpretations of arbitration law this summer, federal courts seem intent on getting back to basics.  In recent weeks, federal appellate courts have reminded parties who has the burden of proving an agreement to arbitrate, what should happen to the case when arbitration gets compelled, how parties waive their right to arbitration, and what is a “reasoned award.” Burden of Proof The Eleventh Circuit took the opportunity to clarify that...

ABA Section of Dispute Resolution Comments on CFPB Rule Proposal
August 23, 2016

The ABA Section of Dispute Resolution recently filed a comment letter on the rule proposal, but confined its comments to the second...