If your company includes arbitration clauses in its contracts with customers or employees, then a recent U.S. Supreme Court decision provides a how-to course on enforcing your arbitration rights.
For a Supreme Court that often cannot agree on what day of the week it is, a unanimous 9-0 decision in Morgan v. Sundance, Inc. provided absolute certainty on one narrow issue and one broader issue.
The narrow lesson: A party to an arbitration agreement needs to invoke its right to arbitrate immediately when a dispute arises, rather than participating in litigation in court and later trying to enforce the arbitration clause.
The broader lesson: The Federal Arbitration Act requires courts to enforce arbitration clauses the same way that courts enforce any other contract clause, but does not actually favor arbitration by letting courts apply rules that make arbitration clauses more enforceable than other types of contract clauses.
Sundance, Inc., operates Taco Bell franchises and required employees to arbitrate certain employment-related disputes. Plaintiff Robyn Morgan signed the arbitration agreement included in her employment application, but later filed a federal class action lawsuit alleging that the company did not pay employees for all overtime they worked.
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