Gibbons Law Alert

Gibbons Law Alert

Tagged: Arbitration

Parties Must Clearly Agree to Delegate Arbitrability to an Arbitrator, Says the NJ Supreme Court

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Posted in Class Action Defense / General Litigation

On July 28, 2016

In its most recent pronouncement on arbitration clauses, the New Jersey Supreme Court confirmed that it is for the Court, and not an arbitrator, to determine whether the parties have agreed to arbitrate consumer fraud claims in the absence of a clear delegation clause to the contrary. In Morgan v. Sanford Brown Inst., the New Jersey Supreme Court reversed an order of the Appellate Division holding that arbitrability was for the arbitrator to decide, finding that under Atalese v. U.S. Legal Servs. Grp. and First Options of Chi., Inc. v. Kaplan, the agreement to delegate arbitrability to an arbitrator must, as with the other arbitration provisions, clearly inform the average consumer of the rights he or she is giving up.

Arbitration Clause Held Too Vague to Cover Statutory Claims

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Posted in Alternative Dispute Resolution

On July 25, 2016

Employers drafting arbitration clauses for employment contracts and others drafting arbitration agreements generally need to be familiar with the line of New Jersey cases involving arbitration clauses, including the Appellate Division’s recent opinion in Anthony v. Eleison Pharmaceuticals LLC, Docket No. A-932-15T4 (App. Div. July 18, 2016), where the court held that an arbitration clause that does not include reference to a waiver of plaintiff’s statutory rights or a jury trial does not constitute a valid waiver of the right to have claims decided in a judicial forum.

Seventh Circuit Creates Circuit Split, Striking Down Agreement to Arbitrate Employment Claims on an Individual Basis

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Posted in Alternative Dispute Resolution

On June 8, 2016

On May 26, 2016, the United States Court of Appeals for the Seventh Circuit issued its decision in Lewis v. Epic Systems Corp., becoming the first federal court of appeals to decide that an agreement between an employer and an employee to arbitrate wage-and-hour claims only on an individual basis, as opposed to a class action basis, is unenforceable. The court’s opinion has created a circuit split, as the Second, Fifth, and Eighth Circuits have enforced similar agreements.

“Bound by the Terms of His Bargain”: Third Circuit Underscores the Difficulty of Vacating Arbitration Awards

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Posted in General Litigation

On February 4, 2016

In a recent precedential decision, Whitehead v. The Pullman Grp., LLC, the Third Circuit reminded litigants that it’s as tough as ever to vacate an arbitration award – and cast further doubt on the viability of the “manifest disregard of the law” standard here. Appellant Pullman entered into a contract with two singer-songwriters in May 2002, which gave him the exclusive option to purchase their song catalog following a 180-day due diligence period.

Third Circuit in Chesapeake Appalachia: Incorporating AAA Rules Not Enough to Satisfy the Onerous Burden of Overcoming Presumption in Favor of Judicial Resolution of Class Arbitrability

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Posted in Class Action Defense

On February 3, 2016

In Chesapeake Appalachia, L.L.C. v. Scout Petroleum, L.L.C., the Third Circuit picked up where it left off after Opalinski v. Robert Half International Inc. In Opalinski, the Circuit held, for the first time, that “the availability of class arbitration constitutes a ‘question of arbitrability’ to be decided by the courts—and not the arbitrators—unless the parties’ arbitration agreement ‘clearly and unmistakably’ provides otherwise.”

Fifth Circuit Upholds Arbitration Agreement Prohibiting Class/Collective Actions and Cautions NLRB to Reconsider Board Policy

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Posted in Alternative Dispute Resolution

On November 5, 2015

Last week, in Murphy Oil USA, Inc. v. NLRB, the United States Court of Appeals for the Fifth Circuit upheld an arbitration agreement requiring employees to arbitrate claims on an individual basis, thereby reaffirming its holding in D.R. Horton, Inc. v. NLRB, despite the National Labor Relations Board’s (“NLRB”) aggressive attempt to find arbitration agreements unlawful. The case is noteworthy because the court rebuffed the Board’s effort to circumvent D.R. Horton and cautioned the NLRB “to strike a more respectful balance between its views and those of circuit courts” that review them. One wonders whether the NLRB will change its current stance against arbitration agreements that prohibit class/collective actions. Regardless, the Fifth Circuit’s decision helps to settle the current state of the law at the circuit court level that arbitration agreements and class/collective action waivers are lawful under the National Labor Relations Act (“NLRA”).

Supreme Court Declines to Hear Challenge to New Jersey’s Requirement of Express Waiver Language for Enforcement of Arbitration Provision in Consumer Contracts

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Posted in Class Action Defense / General Litigation

On July 6, 2015

The Supreme Court of the United States declined to review the New Jersey Supreme Court decision in U.S. Legal Services Group v. Atalese, holding that an arbitration provision in a consumer contract was not enforceable because the contract’s language waiving the consumer’s right to sue was not clear and unambiguous. The New Jersey Supreme Court’s decision, which affects the enforceability of arbitration provisions interpreted under New Jersey law, directs that such provisions must clearly notify the parties of their waiver of the right to bring a lawsuit.

New Jersey Appellate Panel Upholds Pre-Discovery Dismissal of Weak Class Action Claims

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Posted in Class Action Defense

On June 2, 2015

In Myska, et al. v. New Jersey Manufacturers Insurance Co. et al., New Jersey’s Appellate Division recently upheld a pre-discovery striking of a complaint’s class allegations and dismissal of its Consumer Fraud Act claims because the complaint, the underlying policies, and other documents referenced by the complaint showed that class treatment was not warranted and that the plaintiffs could not prevail on their Consumer Fraud Act claims.

Business Organizations Seeking Quick and Inexpensive Resolutions of Business Disputes Need to Know About Delaware’s Rapid Arbitration Act

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Posted in General Litigation

On June 1, 2015

Arbitration is supposed to achieve quick, fair, and inexpensive resolutions of business disputes. But, seemingly more often than not, arbitration fails to fulfill its promise due to expensive and time-consuming pre-hearing discovery, lengthy hearings, and spiraling judicial review of arbitral awards. The Delaware Rapid Arbitration Act, which became effective on May 4, 2015, is Delaware’s unique and cutting-edge effort to offer a new brand of arbitration designed to achieve the original promise of quick and efficient justice.

No Specific Waiver, No Arbitration: Enforceability of Arbitration Provisions in New Jersey Real Estate Contracts in Doubt Following Dispenziere v. Kushner Cos.

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Posted in Development/Redevelopment / Real Estate / Transactional Real Estate and Leasing

On January 5, 2015

Companies doing business in New Jersey and accustomed to settling contract disputes through binding arbitration should carefully review their contracts – and carefully draft all future contracts – to ensure that each arbitration provision contains clear and unambiguous language that the parties are waiving their rights to sue in court. An arbitration clause stating that all disputes will be determined through binding arbitration, but failing to contain this explicit waiver, may not be enforceable in accordance with the recent holding by the Appellate Division in Dispenziere v. Kushner Cos.

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