The Supreme Court Holds That Arbitrators, Not Courts, May Decide Challenges To The Enforceability Of Stand-Alone Arbitration Agreements
Yesterday, in Rent-A-Center, West, Inc. v. Jackson, No. 09-497, the Supreme Court held 5-4 that a party seeking to avoid arbitration under a stand-alone arbitration agreement must challenge the specific provision delegating authority to the arbitrator to decide challenges to the agreement’s validity, and not the agreement as a whole. The decision may prompt employers and business owners to use separate, stand-alone arbitration contracts to enhance the likelihood that challenges to the enforceability of the arbitration agreements will first be heard by arbitrators, not courts. In its decision, written by Justice Scalia, the Court reasoned that provisions contained within an agreement to arbitrate are themselves severable under Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967), and thus challenges to the entire arbitration agreement—even in connection with threshold issues of arbitrability—are within the province of the arbitrator.