A US Supreme Courtroom case on whether or not trial court docket proceedings ought to mechanically be paused whereas defendants struggle to ship disputes to arbitration guarantees to reshape litigation methods in employment fights.
The justices final week agreed to weigh the query of whether or not trials ought to be halted throughout an enchantment of a trial court docket determination denying a defendant’s movement to compel arbitration.
Employers and employee advocates alike are carefully watching the case, which might resolve a federal appeals court docket divide. The choice guarantees to affect each side’ litigation methods.
The difficulty is earlier than the court docket in a mixed pair of circumstances involving Coinbase World Inc. introduced by customers who defeated the cryptocurrency trade’s bids to ship disputes with the platform to arbitration. The US Courtroom of Appeals for the Ninth Circuit refused to remain district court docket proceedings whereas contemplating Coinbase’s enchantment.
A uniform precedent requiring a swimsuit to maneuver ahead whereas the defendant presses an enchantment to compel arbitration might drive employers into costly and time-consuming dual-front fights, and provides staff important leverage in pushing for settlements, attorneys who signify employers mentioned.
“If, as on this case, workers can provoke litigation in a circuit that offers the court docket discretion to remain pending enchantment, the employer would lose important protections,” mentioned Richard M. Volin, principal at Volin Employment Regulation.
Absent an automated keep, an employer denied arbitration on the district court docket may very well be burdened by briefing, skilled work, and sophistication discovery. If their enchantment is profitable, the events must begin anew, Volin added.
“That potential burden with duplicative proceedings is very essential in employment litigation that usually entails fee-shifting provisions,” which require the prevailing get together to be paid authorized charges and associated prices, Volin mentioned. It provides “strain on an employer to settle due to the prospect of paying lawyer’s charges,” he mentioned.
David J. Harris Jr. of Finkelstein & Krinsk LLP, who represents a few of the Coinbase customers, lauded the justices for taking over the case.
“On its face, this will likely seem like solely a technical procedural subject that the Supreme Courtroom is about to resolve. In observe, nonetheless, the present legislation of the six circuits wrongly hinders entry to justice for many individuals, in lots of varieties of civil circumstances throughout the nation,” Harris mentioned in an announcement.
Counsel for different events didn’t instantly reply to requests for remark.
The Third, Fourth, Seventh, Tenth, Eleventh, and District of Columbia circuits have precedents guaranteeing a keep of the underlying litigation pending enchantment of the denial of a movement to compel arbitration, Coinbase told the Supreme Courtroom in its petition for evaluate.
The Second, Fifth, and Ninth Circuits go away it as much as district courts to resolve whether or not to pause or proceed circumstances whereas an enchantment on arbitrability is pending. That stance warrants excessive court docket motion as a result of these appeals courts deal with a substantial variety of arbitration-related appeals, the submitting added.
Attorneys who signify staff contend that permitting employers to pause circumstances whereas they litigate the arbitration query would put worker plaintiffs at a substantial drawback by prolonging their circumstances for years.
“It forces the worker to decide to take a seat and anticipate an enchantment or to comply with go to arbitration. That is meant to make it tougher for workers to get to court docket,” mentioned Brian Heller, a companion at Schwartz Perry & Heller LLP.
The Federal Arbitration Act, which usually favors arbitration, is silent on whether or not an automated keep ought to be granted pending an enchantment of a denied movement to compel.
A ruling for Coinbase would prolong the statute’s attain and permit it “to turn into a weapon for employers to defend themselves from employee lawsuits searching for to carry them accountable for primary violations of our employment legal guidelines,” mentioned Hugh Baran of Kakalec Regulation PLLC.
Whereas appeals courts are divided on the problem, it’s fairly uncommon for a court docket to disclaim a movement just like the one at subject within the Coinbase case if the movement to compel arbitration had an opportunity of success on enchantment, Heller mentioned. “This can be a very obscure subject,” he added.
If circumstances are delayed, witnesses’ reminiscence would fade or proof for discovery would go stale, Baran mentioned.
“It’s a typical tactic,” by the protection bar, “which is being prolonged right here,” he mentioned.
Baran pointed to the Supreme Courtroom’s decision final Could in Morgan v. Sundance Inc., which mentioned that whereas the Federal Arbitration Act usually favors arbitration, “a court docket could not devise novel guidelines to favor arbitration over litigation.”
Coinbase is actually asking the justices to do this, Baran mentioned.