Posts Tagged ‘Arbitration Agreements’

Latest FAA Section 1 Transportation Worker Exemption Development: SCOTUS Says “No” to Employer’s Bright-Line Rule Conditioning FAA Exemption Eligibility on Requiring Employee to Cross Border to be “Engaged in Commerce”

June 15th, 2026 Appellate Practice, Applicability of Federal Arbitration Act, Applicability of the FAA, Arbitrability, Arbitration Agreement Unenforceable, Arbitration Agreements, Arbitration Law, Arbitration Practice and Procedure, CPR Alternatives, Drafting Arbitration Agreements, Employment Arbitration, Enforcing Arbitration Agreements, FAA Chapter 1, FAA Section 1, FAA Section 2, FAA Section 3, FAA Transportation Worker Exemption, Federal Arbitration Act Enforcement Litigation Procedure, Federal Arbitration Act Section 1, Federal Arbitration Act Section 2, Motion to Compel Arbitration, Practice and Procedure, Professor Angela Downes, Professor Downes, Richard D. Faulkner, Russ Bleemer, Section 1, Section 2, Section 3 Stay of Litigation, Stay of Litigation, Stay of Litigation Pending Arbitration, Subject Matter Jurisdiction, Supreme Court, Textualism, Videos, Webinars No Comments »

SCOTUS’S Most Recent FAA Section 1 Transportation Worker Exemption Case: Introduction

FAA Section 1 Transportation Worker ExemptionMay was a big month for arbitration in the U.S. Supreme Court. The Court decided the two Federal Arbitration Act (“FAA”) cases on its 2025 Term docket, one on subject matter jurisdiction, the other on the scope of the FAA Section 1 transportation workers exemption.

On May 14, 2026, the Court decided Jules v. Andre Balazs Properties, No. 25-83, slip op. (U.S. May 14, 2026). Jules held that “a federal court with pre-existing jurisdiction over claims that it stayed pending arbitration under §3 can adjudicate a §9 or §10 motion even if that motion does not present, on its face, an independent basis for federal jurisdiction.” Jules, slip op. at 7. Associate Justice Sonia Sotomayor wrote the Court’s well-reasoned, 9-0 opinion in Jules. Professor Angela Downes, Professor Richard D. Faulkner, and the author discussed the then-pending Jules case in a March 27, 2026 YouTube video hosted by the International Institute for Conflict Prevention and Resolution (“CPR”)’s Russ Bleemer and entitled Hot Topics: The Supreme Court’s March on Arbitration. The Arbitration Law Forum will be reporting more about Jules in the not-too-distant future.

But the focus of this post is the second of the two arbitration-law cases decided in May of this 2025 Term, Flowers Foods, Inc. v. Brock, No. 24-935, 608 U.S. ___, slip op. (May 28, 2026), which concerned the scope of the FAA Section 1 transportation workers’ exemption. In Brock the Court unanimously held that a worker who transports goods only within one State may still belong to a class of workers “engaged in . . . interstate commerce” if the transportation work they perform intrastate is part of the route the goods travel interstate. Brock, slip op. at 3. If so, then that worker’s arbitration agreement may under FAA Section 1 be exempt from FAA enforcement. Id.; 9 U.S.C. § 1.

Simple, right? Perhaps, but it underscores an important doctrinal point. Section 1 does not inquire whether a transportation worker actually crosses a state line. It does not ask  whether the worker personally crosses a state line. And it does not ask whether the worker physically touched, loaded, unloaded, or otherwise interacted with a vehicle that crossed a state line. As interpreted by Brock, what Section 1 asks—though not in these precise words—is whether whether the transportation worker plays a “direct, active, and necessary” role in the interstate movement of goods, irrespective of where in the goods’ path of travel the worker played that role. Slip op. at 8. As Associate Justice Neil M. Gorsuch—who authored the opinion for a unanimous Court— aptly explained, applicability of the FAA does not turn on “a game of tag with vehicles” that cross state lines. Slip op. at 3. Continue Reading »

Small Business B-2-B Arbitration Part II.B.2(C): Other Structural Aspects of Pre-Dispute Arbitration Agreements—Who will the Arbitrators be?  

November 13th, 2014 Arbitration Agreements, Arbitration and Mediation FAQs, Arbitration as a Matter of Consent, Arbitration Practice and Procedure, Arbitrator Selection and Qualification Provisions, Drafting Arbitration Agreements, Making Decisions about Arbitration, Nuts & Bolts, Nuts & Bolts: Arbitration, Small Business B-2-B Arbitration, United States Supreme Court Comments Off on Small Business B-2-B Arbitration Part II.B.2(C): Other Structural Aspects of Pre-Dispute Arbitration Agreements—Who will the Arbitrators be?  

In Part II.B.2(A) we identified three key structural aspects of pre-dispute B-2-B arbitration, and discussed the first two in that and a subsequent post. This Part II.B.2(C) wraps up our discussion of arbitration-agreement structure by briefly examining a topic that is at least as important as the scope of the agreement: who the decision makers will be and how they will be selected.

As one renowned jurist put it, “selection of the decision maker by or with the consent of the parties is the cornerstone of the arbitral process.”[1] Arbitration allows the parties considerable input into the selection of who the decision makers will be, something that can make it a very attractive alternative to litigation for one or both of the parties. Parties who do not opt out of the court system are left with the luck of draw.

Savvy users of arbitration—and for that matter, most persons with dispute resolution experience in judicial or arbitral forums or both—know that decision makers, whether randomly assigned or selected, are not fungible commodities. Were they fungible, let alone commodities, there would likely be little or no controversy surrounding appointments to the United States Supreme Court.

But differences in judicial philosophy do not have to be based on so-called “liberal,” “moderate” or “conservative” views to be important, and perhaps even outcome-determinative. For example, the composition of a three-judge appellate panel can in many cases significantly influence the outcome of an appeal in many civil cases involving any number of legal and policy issues that are not the subject of discussion, let alone controversy, in the mainstream media.

Presumably many lawyers who argue appeals before three-judge panels (including the author) would scream “halleluiah!” had they the opportunity to select even one member of a three-judge appeals panel—or even if each party got to select one, leaving those two to select a third.

But time and time again, we see situations where parties who could have that opportunity—in the arbitration context, that is— had they negotiated it, or who could have at least participated meaningfully in the selection of one or more arbitrators had they exercised their contract rights with due diligence, end up having little if any meaningful input into the selection process. That type of lost opportunity usually redounds to their detriment, especially when their counterparts not only negotiate arbitrator selection provisions that suit their purposes, but also fully and wisely exercise their arbitrator selection rights. Continue Reading »

Arbitration and Mediation FAQs: What do the Terms Arbitrable, Arbitrability, and Question of Arbitrability Mean, and Why do they Matter?

March 26th, 2014 Arbitrability, Arbitration and Mediation FAQs, Arbitration Practice and Procedure, Authority of Arbitrators, Awards, Existence of Arbitration Agreement, Grounds for Vacatur, Practice and Procedure, Small Business B-2-B Arbitration, United States Supreme Court Comments Off on Arbitration and Mediation FAQs: What do the Terms Arbitrable, Arbitrability, and Question of Arbitrability Mean, and Why do they Matter?

 Arbitrable, Arbitrability and Question of Arbitrability

If you’ve ever been unfortunate enough to be privy to a conversation about arbitration law, you probably heard things like:

“The dispute arguably falls within the scope of the agreement and is therefore arbitrable.”

“Oxford expressly pointed out that none of the parties argued that consent to class arbitration is a question of arbitrability.”

“Did the parties clearly and unmistakably agree to arbitrate arbitrability? Because if they did, questions of arbitrability are arbitrable.”

Arbitration-law parlance is probably more arcane and cryptic than it has to be, but it has been with us for several decades and there’s no indication that it is likely to change any time soon. Learning it may be painful, but is usually well worth the modest effort required.

Today we’ll define in plain English some of the most bandied-about arbitration-law terms: “arbitrable,” “arbitrability” and “question of arbitrability.” And in the process we’ll try to explain why these closely-related terms are significant in matters governed by the Federal Arbitration Act (the “FAA”). Continue Reading »

Small Business B-2-B Arbitration Part II.B.2(A): Other Structural Aspects of Pre-Dispute Arbitration Agreements—What am I Agreeing to Arbitrate?

January 2nd, 2014 Arbitrability, Arbitration Agreements, Arbitration Practice and Procedure, Authority of Arbitrators, Awards, Drafting Arbitration Agreements, Making Decisions about Arbitration, Small Business B-2-B Arbitration Comments Off on Small Business B-2-B Arbitration Part II.B.2(A): Other Structural Aspects of Pre-Dispute Arbitration Agreements—What am I Agreeing to Arbitrate?

In the last installment of our B-2-B Arbitration series we focused on one of the most important structural aspects of pre-dispute arbitration agreements: the mutual promise to submit disputes to arbitration, what it means and how its performance by the parties through their post-dispute submission defines and delimits the scope of authority parties actually delegate—as opposed to promise to delegate—to arbitrators to resolve particular disputes.

But there are other important structural aspects of arbitration agreements about which business people should be mindful if they wish to make informed decisions about arbitration. While a comprehensive discussion of them would be far beyond the scope of this post, let’s focus briefly on arbitration-agreement terms that bear on the following questions: Continue Reading »

Improving Arbitration-Award Making and Enforcement by Faithfully Implementing the Purposes and Objectives of the Federal Arbitration Act

November 12th, 2013 Arbitration Agreements, Arbitration Practice and Procedure, Awards, General, Judicial Review of Arbitration Awards, Small Business B-2-B Arbitration Comments Off on Improving Arbitration-Award Making and Enforcement by Faithfully Implementing the Purposes and Objectives of the Federal Arbitration Act

Part I:

An Introduction to the Problem and its Solution

Arbitration can be a very effective way of resolving a wide range of disputes arising out of many legal and commercial relationships. It can benefit the parties if they make informed decisions about agreeing to it, and craft their agreement accordingly. It can benefit the courts and the general public by shifting to the private sector dispute-resolution costs that the public-sector would otherwise bear.

Arbitration is not a perfect form of dispute resolution (and none is, including court litigation). That is so even when parties carefully draft their arbitration agreements, and the parties, arbitrators, arbitration service providers and courts do their best to ensure the integrity and reliability of the process and otherwise strive to protect the legitimate expectations of the parties. But at least over the last couple of decades or so, arbitration has, in the opinion of many, become a less attractive alternative to court litigation than it was intended to be, could be and once was. Continue Reading »

Small Business B-2-B Arbitration Part I: Introduction — Should we Make Arbitration Part of the Deal?

March 28th, 2013 Arbitration Agreements, Making Decisions about Arbitration, Small Business B-2-B Arbitration Comments Off on Small Business B-2-B Arbitration Part I: Introduction — Should we Make Arbitration Part of the Deal?

Small businesses (including sole proprietors) frequently must negotiate arms-length commercial transactions with their more economically powerful counterparts and,  not infrequently, must decide whether to accept an offer to make an arbitration agreement part of the deal.  Whether or not to accept that invitation, and, if so, under what terms, may seem like a straightforward question susceptible to an easy answer, and it can be tempting to think that the risks associated with making the wrong choice are minimal, even in the event that a dispute arises and a party demands arbitration.

Yet any businessperson who has found herself at the wrong end of an out-of-whack-but-unlikely-to-be-vacated arbitration award will surely question the validity of that assumption,  irrespective of whether she relied upon it when she agreed to arbitrate.  Arbitration can offer some significant benefits, but to achieve them one must accept some significant risks.  Whether or not to agree to it in the context of any particular deal is a decision requiring meaningful due diligence tailored to address the specifics of the contemplated transaction that may give rise to a dispute subject to arbitration. Continue Reading »