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► SCOTUS To Decide Important Arbitration Question

You worked so hard on your arbitration agreement and its rollout. It required a lot of time, effort, and money. After it’s been implemented, a discrimination lawsuit is filed against you in federal court by an employee. Ah-ha! You ask the court to send the claim to arbitration, but the court finds your policy legally deficient and denies the request. You appeal.

But what happens to the claim in the trial court at that point? Does it still proceed in the trial court while the appeal awaits decision, or does the appeal operate to “stay” (i.e., put on hold) all proceedings in the trial court until the appeal is decided? The U.S. 5th Circuit Court of Appeals (which covers employers in Louisiana, Mississippi, and Texas) says it’s the first option. But the U.S. Supreme Court might say otherwise.

Cryptocurrency Dispute Arises

Coinbase is a company that operates a cryptocurrency exchange, similar to the recently failed FTX. There, users of the exchange can buy, sell, and transact in various digital currencies such as bitcoin, ether, or dogecoin. (I don’t invest in what I don’t understand, nor do I attempt to explain what I don’t understand.)

To use the service, a person must agree to send a dispute with the company to arbitration. A dispute did arise (imagine that!), a lawsuit was filed, and the company’s request to compel arbitration was denied by the court. Thus, the dilemma described above arose and has now found its way to the High Court (Coinbase, Inc. v. Bielski).

Bottom Line

We will let you know what SCOTUS decides. We hope the Court decides that when an appeal is filed, then the trial proceedings come to a full stop! Why? Because if not, then an employer must fight on two fronts—both the appeal and the ongoing litigation. That is expensive, which is bad for the company, and breeds uncertainty, which is even worse.

Michael P. Maslanka is an assistant professor at the UNT-Dallas College of Law. He practiced law from 1981 until he joined the faculty in July 2015. He was Chair of the Labor and Employment section of a large Dallas firm and was the managing partner of the Dallas office of two national law firms prior to July 2015.

[1/2023]

 

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