Joshua Horn is a partner at Fox Rothschild LLP and co-chair of the Securities Industry Practice Group. Amit Shah, an associate at the firm, works in the same practice group. Their e-mail addresses are Jhorn@foxrothschild.com and Ashah@foxrothschild.com.
How court decisions could affect efforts to persuade Congress to respond to political pressure to change the landscape of employment and consumer arbitration.
The Supreme Court reinforced the longstanding policy in favor of arbitration in Hall Street Associates v. Mattel by narrowly restricting the grounds to vacate an award under the Federal Arbitration Act (FAA).1 Nevertheless, the practical impact of this decision has been less than clear in the federal appeal courts that have interpreted Hall Street.2 This uncertainty has fueled the movement against enforcing pre-dispute arbitration agreements in all employment, consumer and franchise agreements based on the belief that such agreements unfairly favor corporations and business.3
The Supreme Court recently agreed to review Stolt-Nielson v. AnimalFeeds International Corp.,4 a 2nd Circuit decision interpreting Hall Street. This puts the Supreme Court in a position to clarify any remaining ambiguities regarding the grounds available to vacate or modify an arbitration award. This article suggests that Congress allow the Supreme Court to clarify the scope of review under the FAA before taking any action on proposed legislation that could irreparably harm the arbitration process.