930 F.3d 715
5th Cir.2019Background
- 20/20 Communications required field sales managers to sign a Mutual Arbitration Agreement that expressly bars class or collective arbitration “to the maximum extent permitted by law” and provides that arbitrators will hear only individual claims.
- Several employees initially filed individual arbitration claims, then amended them to assert identical class claims; some arbitrators issued clause-construction awards, and one arbitrator found the class waiver unenforceable under the NLRA.
- 20/20 sued in federal court (Blevins) seeking a declaration that class arbitrability is a question for courts and that the class waiver precludes class arbitration; separately it sought to vacate an arbitrator’s clause-construction award (Crawford).
- The district court in Crawford confirmed the arbitrator’s award; the district court in Blevins later ruled that the arbitrator, not the court, should decide class arbitrability and dismissed the complaint.
- The Fifth Circuit consolidated the appeals and considered whether availability of class arbitration is a gateway question for courts (absent clear and unmistakable agreement to delegate it to arbitrators) and whether the arbitration clause here clearly and unmistakably delegated that question to the arbitrator.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether availability of class arbitration is a gateway question of arbitrability for courts to decide absent clear and unmistakable delegation to arbitrators | Blevins: Class arbitrability is a threshold issue courts should decide, not arbitrators | Employees: Parties’ arbitration clause and incorporated AAA rules delegate arbitrability disputes (including class issues) to arbitrators | Court: Class arbitrability is a gateway question presumptively for courts, absent clear and unmistakable delegation to arbitrators |
| Whether the arbitration agreement here clearly and unmistakably delegates class-arbitrability decisions to the arbitrator | Blevins: The class-waiver and specific language foreclose delegation; parties barred class arbitration to the maximum extent permitted by law | Employees: General delegation clauses, AAA incorporation, and broad “all disputes” language show intent to delegate arbitrability to arbitrators | Court: No clear-and-unmistakable delegation; the explicit class-waiver and exception clauses outweigh general delegation language |
| Effect of class-waiver phrase "to the maximum extent permitted by law" on arbitrability allocation | Blevins: That phrase reinforces that parties intended to bar class arbitration and keep courts as gatekeepers | Employees: That qualification leaves open legal questions (e.g., NLRA) for arbitrators to resolve | Court: The qualification does not clearly assign gateway decisionmaking to arbitrators; it supports court determination of class arbitrability |
| Disposition of consolidated appeals (Blevins and Crawford) | N/A | N/A | Blevins reversed and remanded for further proceedings; Crawford vacated and remanded with instructions to dismiss as moot in light of holding that courts decide class arbitrability |
Key Cases Cited
- Henry Schein, Inc. v. Archer & White Sales, 139 S. Ct. 524 (rule that courts normally must enforce delegation clauses absent clear-and-unmistakable basis to refuse)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (clear-and-unmistakable standard for delegating arbitrability to arbitrators)
- Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63 (distinguishing gateway arbitrability questions like contract formation)
- Lamps Plus, Inc. v. Varela, 139 S. Ct. 1407 (not deciding whether class arbitrability is a gateway question)
- Del Webb Cmtys., Inc. v. Carlson, 817 F.3d 867 (4th Cir. holding class arbitrability is for courts)
- Reed Elsevier, Inc. v. Crockett, 734 F.3d 594 (6th Cir. holding class arbitrability is a gateway issue)
- Herrington v. Waterstone Mortgage Corp., 907 F.3d 502 (7th Cir. holding class arbitrability is for courts)
- Catamaran Corp. v. Towncrest Pharmacy, 864 F.3d 966 (8th Cir. holding class arbitrability is a gateway issue)
- Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (class arbitration binds absent parties and raises distinct concerns)
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (class arbitration alters arbitration’s costs, procedures, and efficiencies)
- Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (class action is an exception to the usual rule of individual litigation)
- Pedcor Mgmt. Co. v. Nations Personnel of Texas, 343 F.3d 355 (5th Cir.: if parties clearly submit arbitrability to arbitrator, class-availability questions can be for arbitrator)
- Robinson v. J & K Admin. Mgmt. Servs., Inc., 817 F.3d 193 (5th Cir. interpreting Pedcor and addressing breadth of delegation clauses)