Class Arbitration “No Mere Detail”


In a case likely to affect employer-employee arbitration agreements, one court has ruled that a court, and not an arbitrator, must determine whether ambiguous arbitration agreements cover class claims. Reed Elsevier, Inc. v. Crockett, No. 12-3574 (6th Cir. 2013). The case involves a LexisNexis customer disgruntled over a billing dispute. The issue taken to the court was whether the arbitration agreement between the parties allowed the customer to bundle his claim with others’ into a class arbitration. The court ruled that, because “whether the parties [agreed to] arbitrate one claim or 1,000 in a single proceeding” is “no mere detail,” it is a “gateway” question to be determined by a court rather than a “subsidiary” question to be determined by an arbitrator. Thus, unless the parties specifically express that an arbitrator should decide whether class claims can be arbitrated, those issues will be decided by the court. Here, the arbitration agreement was silent as to whether class claims would be subject to arbitration. Silence, the court concluded, was “not enough to wrest [the] decision from the courts,” nor, in this case, did silence make class claims arbitrable.

To avoid litigating over whether arbitration agreements cover class claims, employers should include specific language in the arbitration agreements. Silence might bar class arbitration in the Sixth Circuit, but specific language is more certain. Here, without class arbitration, the individual’s claim was “economically unfeasible,” so the court threw in some free advice—switch to Westlaw.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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