Earlier this week, on remand from the Supreme Court, the Fifth Circuit issued its decision in Archer & White Sales, Inc. v. Henry Schein, Inc., No. 16-41674 (5th Cir. Aug. 14, 2019) (click here for a copy of the decision). The decision is a worthwhile read for anyone drafting a sophisticated arbitration clause, particularly if the arbitration clause contains carve-outs or exemptions. The Fifth Circuit issued a carefully-reasoned, thoughtful opinion exploring the language of the arbitration clause.
The clause at issue was construed as delegating arbitrability issues to the arbitrator, and the clause also contained a carve-out provision for certain disputes, including “actions seeking injunctive relief.” The Fifth Circuit, analyzing the intersection of the delegation clause and the carve-out provision, determined that the arbitration agreement delegated arbitrability of all disputes to the arbitrator, except for those disputes within the carve-out. In effect, because of the carve-out, arbitrability disputes regarding injunctive relief are for the court to resolve.
