In Robinson v. J&K Administrative Management Services, No. 15-10360 (5th Cir. Mar. 17, 2016) (click here for a copy of the decision), the Fifth Circuit recently addressed an important “who decides” problem in arbitration law: who decides whether class arbitration is permitted by an arbitration agreement, a court or an arbitrator? This issue heavily split the Supreme Court in 2003 in Green Tree v. Bazzle, which did not produce a majority opinion.
The Fifth Circuit in Robinson held that where parties enter into a broad arbitration clause, which provides for an arbitrator to decide arbitrability issues, then the availability of class arbitration is a procedural question for the arbitrator to decide.
The facts of Robinson appear to be unusual. Typically, one sees employees file lawsuits in court, with the employee trying to avoid arbitration. However, the employee in this case used an interesting strategy. The employee, who was seeking overtime wages pursuant to the Fair Labor Standards Act, initiated a collective action in arbitration. When the employer did not respond to the initiation of collective arbitration, the employee then filed suit in federal court, asking the court to compel arbitration and allow the arbitrator to determine whether class arbitration was permitted. The district court agreed with the employee’s request to compel arbitration, with the arbitrator to decide the availability of class arbitration, and the Fifth Circuit affirmed.