Arbitrators themselves get to decide if an arbitration agreement is unconscionable, the U.S. Supreme Court decided on Monday. This will make it harder for consumers and employees to challenge the fairness of arbitration agreements. The court held 5-4 in Rent-A-Center, West v. Jackson, that where an arbitration agreeement explicitly delegates to the arbitrator the issue of whether an arbitration agreement as a whole is unconscionable, it is the arbitrator, not a district court, who gets to decide the issue. The exception is where the consumer or employee has challenged the specific delegation clause. In real life, how many consumers or employeees have any idea they can challenge or object to a term of a contract? The decision “greatly limits the ability of consumers and employees to challenge the fairness of arbitration agreements,” according to Deepak Gupta of Public Citizen Litigation Group, who was co-counsel to appellee Antonio Jackson. For more detail read the New Jersey Law Journal coverage.
Justice Stevens issued a strong dissenting opinion, joined by Justices Ginsburg, Breyer and Sotomayor. “Certain issues — the kind that ‘contracting parties would likely have expected a court to have decided’ — remain within the province of judicial review,” Stevens wrote. Those issues “raise questions the parties ‘are not likely to have thought that they had agreed that an arbitrator would’ decide.”
- C. Megan Oltman
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