Many construction contracts these days include an arbitration provision. Those provisions generally provide that disputes between the parties will be resolved through private arbitration rather than litigation in the public court system. As with other contractual rights, the right to invoke arbitration is waivable. Waiver may be accomplished expressly or implicitly.
Legendary jurist Frank Easterbrook of the U.S. Court of Appeals for the Seventh Circuit explored the waiver issue in a concise, five-page opinion released last week in Village of Schaumburg v. Permasteelisa North America Corp., Case No. 24-1168, — F.4th —- (7th Cir. Aug. 18, 2026). The case involves a construction-defect lawsuit filed in court by the owner of the Renaissance Hotel in Schaumburg, Illinois. Several months after the initial filing, the owner added claims against a new defendant, one of the subcontractors on the job. Eight months later, the owner decided that it wanted to arbitrate the claims against that subcontractor.
In the interim, the subcontractor had moved to dismiss. That motion remained pending when the owner moved to compel arbitration. The trial court found that the owner had waived its right to arbitrate through its conduct and denied the owner’s motion. The Seventh Circuit affirmed, reasoning:
The district court did not commit clear error in concluding that the [Owner] waived whatever right it possessed to arbitrate with [the subcontractor]. The [Owner] filed suit without asking that the dispute be sent to arbitration. Two months later [Subcontractor] moved to dismiss the complaint. The [Owner] still did not seek arbitration, perhaps hoping that it would receive a favorable ruling on the merits. Only after letting the district judge spend six months working on [the Subcontractor’s] motion did [Owner] then declare that the dispute does not belong in court. The judge understandably thought that the [Owner] was playing games….
The owner countered the waiver argument by pointing to the contract’s “no-waiver” clause. That clause provided that failure to exercise any right would not be construed as a waiver. Judge Easterbrook rejected that argument as an improper attempt to supplant federal procedural law. Just as parties cannot contract around federal notice-pleading standards, they may not avoid the federal requirement to file timely requests to arbitrate. As Judge Easterbrook explained: “Federal judges are entitled to protect themselves, and litigants in the many other cases awaiting judicial attention, from manipulation.”
A copy of the court’s opinion is located here.