If you have an arbitration agreement, do you have to compel arbitration when the lawsuit is filed or can you wait awhile? This week, the Supreme Court concluded that a party litigating in federal court cannot later compel arbitration by arguing that the delay caused no harm or prejudice to the opposing party. If you have mandatory arbitration agreements, the decision in Morgan v. Sundance Inc. has implications for you. When an employer does not compel arbitration at the outset of litigation, does that constitute a waiver of its right to compel arbitration? This has been the subject of a growing circuit split in federal appeals courts.
The federal circuit courts have used two different tests to decide whether a party waived its right to compel arbitration. Nine federal circuits use a three-part test in which the party attempting to prove a waiver must show (1) the party attempting to compel arbitration had knowledge of an existing right to compel arbitration; (2) the party attempting to compel arbitration committed intentional acts inconsistent with that right to arbitration; and (3) the party opposing arbitration experienced prejudice. Only two circuits – the Seventh Circuit and the D.C. Circuit – utilize a two-part version of this test, doing away with the third requirement that the party opposing arbitration must show it had experienced prejudice.
Robyn Morgan worked at a Taco Bell franchise owned by Sundance, and, as is standard...
Founder and leader of Perez Chapel International, Archbishop Charles Agyinasare has urged Ghanaians to take responsibility for misinformation they share by retracting false claims, apologising to ...