The United States Court of Appeals for the Fifth Circuit has issued an opinion holding the issue of class arbitration is a gateway matter for the courts to decide.  In 20/20 Communications, Inc. v. Crawford, No. 18-10260 (5th Cir., July 22, 2019), a number of employees signed 20/20 Communication’s arbitration agreementas a condition of employment.  The terms of the agreement required each employee to individually arbitrate any future claims against the company.

Several employees eventually filed various arbitration demands against 20/20, but later sought to file identical class arbitration claims instead.  In response, the company asked a district court to issue a declaration stating the issue of class arbitrability was for the courts, not an arbitrator, to decide.  Six of the proposed class members then “asked their individual arbitrators to issue clause construction awards holding that the class arbitration bar is prohibited by the National Labor Relations Act.” One of those arbitrators found the class arbitration bar included in 20/20’s arbitration agreement was unenforceable under the Act.

Next, 20/20 sought to vacate the arbitrator’s clause construction decision stating the parties’ arbitration agreement was unenforceable.  Instead, however, the district court confirmed the arbitrator’s award.  In another related case, the court also determined it was up to the arbitrator to decide the issue of class arbitrability under the terms of the parties’ agreement.  20/20 then filed an appeal to the nation’s Fifth Circuit Court of Appeals.

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