I would like to highlight a recent cert petition that raises interesting questions about arbitration law and policy. The case, called Peterson v. Minerva Surgical (click here for Supreme Court filings), involves a whistleblower and an allegedly harmful medical device. Although there are some protections for whistleblowers (e.g., under the Sarbanes–Oxley Act, certain whistleblowers cannot be compelled to arbitrate), I’d be in favor of expanding such protections to cover a broader scope of whistleblowers. In my opinion, the drafters of the FAA never envisioned the statute to cover any workplace disputes.
This case also raises questions about judicial standards for vacatur, which are not entirely clear. Although the Supreme Court addressed vacatur standards in its 2008 decision in Hall Street v. Mattel, which explained that the grounds for vacatur under the FAA are exclusive, there remains continued confusion about the existence or validity of the manifest disregard of the law standard and public policy grounds for vacatur. Also, Mattel involved an attempt to expand, via contract, the grounds for vacatur, and lower courts are still split over the related issue of contractually-restricted grounds for vacatur. For example, can parties agree in advance to limit the grounds for vacatur set forth in the FAA? Can parties agree that no petitions to vacate can be filed at all? Courts are currently split about the validity of such contractual restrictions. Moreover, there is still uncertainty about the evident partiality standard for vacatur arising from the different opinions in the Supreme Court’s 1968 Commonwealth Coatings case.
In sum, we have a widespread system of arbitration in the United States, but different aspects of the legal framework governing this arbitration system are subject to confusion and conflicting judicial opinions. The FAA’s standards for vacatur were enacted at a time when the FAA was more limited in its scope. I hope the Supreme Court or Congress will step in and clarify the appropriate standards of judicial vacatur of arbitral awards, especially given the widespread use of arbitration today.