Commercial Litigation and Arbitration

Arbitration — Waiver by Participating in Litigation — Issue for Court or Arbitrator? — Circuit Split

Smith v. Adams & Assocs., 2015 U.S. Dist. LEXIS 138670 (N.D. Ill. Oct. 9, 2015):

Smith concedes that the employment agreement that she signed "contains a provision requiring that employment issues, including claims of discrimination, be arbitrated." (Pl.'s Resp., Dkt. 42, at 1.) Nevertheless, she contends that Adams & Associates waived its right to arbitrate by choosing to proceed in this federal forum and defend against Smith's claims.

 

A. Waiver - A Question for the Arbitrator or the Court?

Generally, courts resolve disputes about arbitrability, such as whether an arbitration clause is binding, and arbitrators "decide disputes about the meaning and application of particular procedural preconditions for the use of arbitration," such as waiver, notice, laches, and estoppel. Martinez v. Utilimap Corp., No. 3:14-CV-310-JPG-DGW, 2015 WL 3932151, at *8 (S.D. Ill. June 25, 2015) [*8]  (citing BG Group, PLC v. Republic of Arg., 134 S.Ct. 1198 (2014)). "The proper course of action, however, is not so clear when the issue is waiver by participation in litigation activity." Id. The circuits are split on whether courts or arbitrators determine whether waiver has occurred, and guidance from the Seventh Circuit on this issue is inconsistent. Id. (collecting cases).

In its reply addressing Smith's waiver by participation argument, Adams & Associates does not contend that an arbitrator should determine if it waived its right to enforce the arbitration clause. Thus, Adams & Associates has waived any argument that waiver must be determined by the arbitrator. Id. The court will determine this issue.

Share this article:

Facebook
Twitter
LinkedIn
Email

Recent Posts

(1) Appellate Review of Inherent Power Sanctions (7th Circuit): Factual Findings Reviewed for Clear Error, Choice of Sanction for Abuse of Discretion — 4-Element Test for Reversal; (2) Sanctions and Class Actions: Monetary Sanctions Properly Imposed on Defendants for Improper Communications with Class Members (Represented Parties) — “[I]f The Class And The Class Opponent Are Involved In An Ongoing Business Relationship, Communications From The Class Opponent To The Class May Be Coercive” (Good Quote); (3) Monetary Sanctions under Goodyear v. Haeger: If Same Fact-Gathering Would Have Been Conducted Absent The Misconduct, No But-For Causation — But Only “Rough Justice” Required, “Not Accountant-Like Precision” (Good Quote) — Once Misconduct Is Clear, Time Spent Ferreting It Out Compensable under Goodyear; (4) Goodyear Did Not Overrule Long-Standing Rule That Courts May Impose Modest Civil Monetary Sanctions to Curb Litigation Abuse; (5) Appellate Jurisdiction Lacking Where Sanctioned Attorney Fails to File Notice of Appeal and Lawyer’s Intent to Appeal Not Apparent from Client’s Notice; (5) Rule 11 Improper Purpose — Party May Have Many Purposes for Pursuing Claim — As Long As Claim Is Supported by Good Faith Belief in the Merits, “A Parallel Reason Does Not Violate Rule 11” — To Deny A Motion for Sanctions, The District Court Need Not Address Every Argument: “Arguments Clearly Without Merit Can, And For The Sake Of Judicial Economy Should, Be Passed Over In Silence” (Good Quote); Non-Monetary Sanction on Counsel: Complete Twice The Required Amount Of Professional Responsibility Hours For Her Next Continuing Legal Education Cycle Imposed By The State Bar

Archives