This week, the U.S. Supreme Court unanimously reversed an earlier Fifth Circuit Court of Appeals decision and held that courts may not decide a question of arbitrability when parties have contractually delegated that question to an arbitrator. Henry Schein, Inc. v. Archer & White Sales, Inc., No. 17-1272 (U.S. January 8, 2019).
While on its face it looks like the matter is settled, this decision left several open questions on remand. In effect, the Court underlined that the arbitration clause should always control, but did not provide guidance on what that clause should look like.
Therefore, careful consideration should be given to developing arbitration provisions in contracts in order to protect your preferred options for dispute resolution. Whether you prefer to avoid arbitration wherever possible by striking such provisions or are seeking to make sure your arbitration clauses are ironclad or limited in scope, your choice of language will make all the difference to the ultimate resolution of the dispute.
To read a more detailed discussion of this ruling and its impact, click here.