Hunton Retail Law Resource

On Monday, the US Supreme Court agreed to consider whether a provision in an arbitration agreement that exempts certain claims from arbitration negates an otherwise clear and unmistakable delegation of questions of arbitrability to an arbitrator. It is a question on which circuits have been divided. On one hand, some courts have found that the gateway question of arbitrability—whether the claims fall within the scope of the carve-out provision—is for the arbitrator to decide. On the other, some courts have found that, where there is a carve-out provision, there is no clear and unmistakable evidence of the parties’ intent to delegate questions of arbitrability to an arbitrator, and questions of arbitrability are to be decided by the court. Undoubtedly, resolution is necessary.

The case at issue, Henry Schein, Inc. v. Archer and White Sales, Inc., involves an antitrust dispute wherein Archer and White Sales, Inc., which distributes, sells, and services dental equipment, alleged conspiracy claims against Henry Schein, Inc., which distributes dental equipment. The relevant agreement included an arbitration provision requiring all disputes arising thereunder or related to the agreement, to be arbitrated, except for actions seeking injunctive relief, among others. Included in Archer and White Sales, Inc.’s complaint was a claim for unspecified injunctive relief. Henry Schein, Inc. moved to compel arbitration, and after a lengthy procedural history, the underlying issue of the operation of the arbitration provision is now before the US Supreme Court.

Interestingly, these parties are not strangers to the Court. In January 2019, in this same case, the US Supreme Court unanimously held that under the Federal Arbitration Act, if parties “clearly and unmistakably” delegate arbitrability questions to an arbitrator, a court cannot second guess the decision to arbitrate that particular dispute, even if the court believes the argument in favor of arbitrability is “wholly groundless.” Now, the Court has yet another opportunity to refine the framework by which arbitration agreements are analyzed.