956 F.3d 335
5th Cir.2020Background
- Roy Conrad, an hourly fuel technician and driver for Sun Coast Resources, sued under the FLSA claiming Sun Coast excluded travel reimbursements and per diems from his regular rate for overtime calculation.
- Conrad brought the overtime claim in arbitration under an employment arbitration agreement that incorporated the AAA employment rules.
- An arbitrator issued a clause-construction award concluding the agreement permitted collective/class arbitration, citing the agreement’s broad scope, an authorization to award all court remedies, Sun Coast’s drafting and failure to carve out class proceedings, and the AAA supplementary class rules.
- Sun Coast sought vacatur under FAA § 10(a)(4), arguing the arbitrator exceeded his powers; the district court denied vacatur and confirmed the award.
- The Fifth Circuit affirmed, holding the arbitrator at least arguably interpreted the agreement and that Sun Coast forfeited its argument that class-arbitrability is a gateway for courts because it failed to raise that delegation objection before the arbitrator and timely in district court.
Issues
| Issue | Conrad's Argument | Sun Coast's Argument | Held |
|---|---|---|---|
| Whether the arbitrator exceeded his powers by ruling the agreement permits class arbitration (vacatur under FAA §10(a)(4)) | Arbitrator interpreted the agreement; award is an interpretation with some basis | Arbitrator exceeded authority; award should be vacated | Affirmed: arbitrator at least arguably interpreted the agreement, so §10(a)(4) vacatur inappropriate |
| Whether class-arbitrability is a gateway question for courts (not arbitrators) absent clear delegation | Agreement delegates arbitrability to arbitrator (broad arbitration clause; incorporation of AAA rules) | Gateway issue for courts per 20/20; arbitrator couldn’t decide it | Court need not decide delegation: Sun Coast forfeited the delegation objection by not raising it before arbitrator and not timely in district court |
| Preservation: whether Sun Coast preserved a delegation challenge | Conrad: Sun Coast litigated classability merits to arbitrator and agreed arbitrator decide class question | Sun Coast: contends it cited authority to challenge arbitrator’s power | Forfeited: Sun Coast never told arbitrator he lacked authority and cited the wrong Opalinski; raised the delegation objection only in a Rule 59 motion |
Key Cases Cited
- Stolt-Nielsen S.A. v. Animalfeeds Int’l Corp., 559 U.S. 662 (U.S. 2010) (arbitrator’s award stands if it at least arguably interprets the contract)
- Oxford Health Plans LLC v. Sutter, 569 U.S. 564 (U.S. 2013) (vacatur under §10(a)(4) only when arbitrator strays from interpreting the contract)
- Reed v. Fla. Met. Univ., 681 F.3d 630 (5th Cir. 2012) (arbitrator found clause allowed class proceedings; later national guidance narrowed vacatur grounds)
- 20/20 Commc’ns, Inc. v. Crawford, 930 F.3d 715 (5th Cir. 2019) (presumption that courts decide class-arbitrability absent clear delegation)
- BNSF Ry. Co. v. Alstom Transp., Inc., 777 F.3d 785 (5th Cir. 2015) (ask whether arbitrators even arguably interpreted the agreement)
- Executone Info. Sys., Inc. v. Davis, 26 F.3d 1314 (5th Cir. 1994) (look to contract and scope of submissions to determine arbitrator’s authority)
- Opalinski v. Robert Half Int’l Inc., 761 F.3d 326 (3d Cir. 2014) (class-arbitrability is a gateway issue for courts)
- First Options of Chi., Inc. v. Kaplan, 514 U.S. 938 (U.S. 1995) (arguing arbitrability to an arbitrator does not necessarily waive the right to have a court decide arbitrability)
- U.S. Bank Nat’l Ass’n v. Verizon Commc’ns, Inc., 761 F.3d 409 (5th Cir. 2014) (court will typically not consider issues first raised on reconsideration)