Third Circuit Enforces Delegation Provision in Arbitration Agreement
A “delegation provision” in an arbitration agreement authorizes the arbitrator to decide issues concerning the arbitrator’s own jurisdiction over disputes before him or her. Absent a delegation provision, such jurisdictional issues are for courts to decide when adjudicating motions to compel arbitration. In its recent decision in Carrone v. United Health Care Group Inc., the United States Court of Appeals for the Third Circuit clarified the circumstances under which courts may entertain challenges to arbitration agreements with delegation provisions. Background Michele Carrone filed suit in federal district court in New Jersey charging her employer and coworkers with discrimination. The defendants moved to compel arbitration. The parties’ arbitration agreement incorporated by reference the Employment Dispute Resolution Rules of the American Arbitration Association (AAA). Rule 6(a) of those rules sets forth a “delegation” provision, to wit: “The arbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope or validity of the arbitration agreement”; and, further: “The arbitrator shall have the power to determine the existence or validity of a contract of which an arbitration clause forms a part.” Carrone opposed the motion to compel arbitration on the grounds that “(1) the arbitration agreement’s amendment provision rendered the agreement illusory, (2) the arbitration agreement as a...