Agreeing with a number of arguments presented in a friend-of-the-court brief submitted by NT Lakis lawyers, the U.S. Supreme Court has once again reinforced the strong federal policy favoring private arbitration over litigation, in this case finding that a California law that undermined enforcement of an arbitration agreement was preempted by the Federal Arbitration Act (FAA).
The decision by the High Court in DIRECTV v. Imburgia, et al., No. 14-462 (U.S. Dec. 14, 2015), concludes that a state court’s anti-arbitration interpretation of a California law that nullified a class waiver provision contained in a consumer arbitration agreement was in direct conflict with the FAA and Supreme Court precedent. The California courts in particular have been hostile to arbitration, and in turn, the Supreme Court has been equally forceful in overturning their anti-arbitration rulings.
The High Court’s decision in DIRECTV reinforces the message that the FAA mandates that arbitration agreements – including in the employment context – be placed on equal footing with other types of contracts, and that they are enforceable absent the limited reasons that would lead a court to invalidate any other contract.
A copy of the Supreme Courts decision in DIRECTV is available here.