Thanks to Lise Gelernter (Teaching Faculty and Director, Externship Programs at SUNY Buffalo Law School) for bringing to my attention this interesting arbitration case decided by the Ninth Circuit on December 17th of last year and providing some commentary.
The case is InÂ Re Wal-Mart Wage and Hour LitigationÂ orÂ Carolyn Burton v. Class Counsel.Â The Ninth Circuitâ€™s summarizes the case thusly:
[T]he panel held that a non-appealability clause in an arbitration agreement that eliminates all federal court review of arbitration awards, including review under Â§ 10 of the Federal Arbitration Act, is not enforceable.
Here is Lise’s commentary:
The court reasoned that if the grounds for vacatur of an award cannot be expanded by contract beyond what is permitted by the FAA Â§Â§10-11 (perÂ Hall Street), a contract cannot eliminate the federal judicial review of arbitration awards that is available under the FAA.Â The Ninth Circuit cited to a Second Circuit case that had a similar holding:
Since federal courts are not rubber stamps, parties may not, by private agreement, relieve them of their obligation to review arbitration awards for compliance with Â§ 10(a)â€ť of the FAA.Â Â Hoeft v. MVL Grp., Inc., 343 F.3d 57, 63â€“64 (2d Cir.2003),Â overruled on other grounds by Hall St. Assocs., L.L.C. v. Mattel, Inc.,Â 552 U.S. 576, 128 S.Ct. 1396, 170 L.Ed.2d 254 (2008).
This creates some tension with the United States Supreme Courtâ€™s strong push for honoring almost any term of an arbitration agreement, but since these holdings are grounded in the specific terms of the FAA, perhaps they are a bit more safe from reversal or even disagreement among other circuits.
Lise points out that you can obtain this Ninth Circuit caseÂ by using the following linkÂ and selecting theÂ Carolyn BurtonÂ case.
This article was originally printed on Workplace Prof Blog on January 20, 2014. Â Reprinted with permission.
About the Author: Paul SecundaÂ isÂ a professor of law at Marquette University Law School. Â Professor Secunda is the author of nearly three dozen books, treatises, articles, and shorter writings. He co-authored the treatise Understanding Employment Law and the case book Global Issues in Employee Benefits Law. Â Professor Secunda is a frequent commentator on labor and employment law issues in the national media. Â He co-edits with Rick Bales and Jeffrey Hirsch the Workplace Prof Blog, recently named one of the top law professor blogs in the country.