In his first opinion since joining the United States Supreme Court, Justice Brett Kavanaugh issued the Court’s opinion in Henry Schein, Inc. v. Archer and White Sales, Inc. upholding parties’ decision to arbitrate their disputes.
The unanimous opinion held that federal courts do not have authority to determine whether a dispute is subject to arbitration when the contract grants that authority to an arbitrator. In many contracts, certain “gatekeeping” functions regarding dispute resolution are vested in an arbitrator, including the authority to determine whether the conflict between the parties is even subject to arbitration. Often, if a party disagreed with an arbitrator’s determination as to whether a dispute was subject to the arbitration provision, parties would seek input from federal courts on the issue. If the federal court found that the person seeking arbitration is making a “wholly groundless” argument that a particular dispute is subject to arbitration, then the Court would claim authority to determine the arbitrability of the dispute.
The Court opined that federal courts have “short-circuit[ed] the process and decide[d] the arbitrability question themselves”, even when the parties’ contract grants this power to an arbitrator. The opinion goes on to explain that the Federal Arbitration Act “does not contain a ‘wholly groundless’ exception, and we are not at liberty to rewrite the statute passed by Congress and signed by the president.” As such, the Supreme Court upheld the sole authority of the arbitrator to determine the arbitrability of a dispute when the contract between the parties provides for the same.
The full opinion of the Court can be found here: https://www.supremecourt.gov/opinions/18pdf/17-1272_7l48.pdf