Jottings By An Employer's Lawyer

Sunday, March 20, 2005

Waiver of Arbitration for Court, Not Arbitrator to Decide

The ultimate holding in this case is one of those in the "it would have been a surprise if it went the other way" department -- an employer does not waive its right to insist on arbitration even though it did not raise it in the administrative process after an EEOC charge was filed. Marie v. Allied Home Mortgage Corp. (1st. Cir. 3/16/05) [pdf].

After Waffle House any other outcome would have been a shock, but the real reason for the 34 page decision was not the outcome, but the issue of who should decide, the court or the arbitrator. That is the reason the Court describes the case as:

deal[ing] with important issues both for Title VII law and for the division of labor between courts and arbitrators after the Supreme Court's decisions in Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (2002), and Green Tree Fin. Corp. v. Bazzle, 539 U.S. 444 (2003).

The Court noted these two cases reaffirmed the rule of thumb that substantive matters remain the province of the courts, while procedural issues are normally for the arbitrator. But the Supreme Court also recognized the differing expertise of the two, so even though waiver is a procedural issue, the Court holds it should decide it, not the arbitrator. One of the reasons for the lengthy opinion may be because it discerns that there is a split on this issue between the 8th and the 5th Circuit. In siding with the 5th, the Court took the opportunity to make its case for its position.


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