If there is a dispute whether parties have agreed to arbitrate a dispute, who has authority to resolve that dispute – the court or the arbitrator? In Blanton v. Domino’s Pizza Franchising LLC, an opinion scheduled for publication by the United States Court of Appeals for the Sixth Circuit, the Court ruled that whether a claim is subject to arbitration should be determined by an arbitrator, not a court, at least based on the American Arbitration Association rules.
In this case, one of the plaintiffs, Derek Piersing, signed an arbitration agreement as part of his employment with a Domino’s franchise. The agreement specified that the arbitration would be conducted according to the American Arbitration Association National Rules for the Resolution of Employment Disputes (“AAA Rules”).
Piersing brought a claim against Domino’s corporate which then moved to compel arbitration under the Federal Arbitration Act. Piersing opposed claiming that it was only the Domino’s franchise that had signed the arbitration agreement and not the franchisor. The district court disagreed with Piersing and entered an order compelling arbitration.
Piersing then appealed to the Court of Appeals. The question in this case is whether, by agreeing to arbitrate claims according to the AAA Rules, there is clear and unmistakable evidence that Piersing agreed to arbitrate the issue of “arbitrability.”
The Court referred to the specific language of the AAA Rules that “[t]he 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.” R. 61-6, Pg. ID 989. The Court ruled that the language is clear and also notes that the Supreme Court, the Sixth Circuit, and other courts, have found that the AAA Rules provide arbitrators the power to resolve arbitrability questions.
The key takeaway from this case is that if you agree to an arbitration agreement to be governed by a specific set of rules, if those rules are clear and unmistakable as to the issue of arbitrability, the Court will enforce those rules.
The full text of the opinion can be read at:
https://law.justia.com/cases/federal/appellate-courts/ca6/19-2388/19-2388-2020-06-17.html
