Several US Supreme Court justices suggested that mandatory arbitration laws don’t corroborate with the lower courts exercising dismissal on wage and hour disputes. Their collective voice raises concerns on the potential strain that could be exerted on the existing judicial system.
During the oral argument convened on Monday, the justices hinted that they were not in complete agreement with the US Court of Appeals for the Ninth Circuit’s decision which upheld dismissal of wage and hour disputes which contravenes the Federal Arbitration Act’s prerequisites.
A contingent representing present and previous employees at the delivery service company IntelliQuick Delivery Inc. accused the firm and its affiliates of wrongly terming them as independent contractors, which undermines their eligibility for benefits such as minimum wage, overtime, and paid sick leave protection under state and federal law.
The case awaits arbitration as agreed upon by both parties. However, the request from the plaintiffs is that the case should be staid during the arbitration procedure.
Under the scanner is the Section 3 of FAA which endorses the enforcement of arbitration agreements. This section explicitly stipulates that any case referred for arbitration must ensure a stay of trial until its conclusion.
The US Supreme Court’s final ruling on the matter is expected to settle a discord among the federal appeals courts pertaining to this issue. Currently, the Ninth, Eighth, Fifth, and First Circuits are on the side of dismissal, citing court’s inherent authority to manage their dockets, whilst the Eleventh, Tenth, Seventh, Sixth, Third, and Second Circuits propose a stay on cases pending the arbitration procedure.
The argument against forced dismissal largely stems from the interpretation of the Federal Arbitration Act which advocates a stay in the trial during arbitration. However, the dismissal proponents argue that retaining the jurisdiction undermines the Congress mandate whilst adding needless complexity to the judicial system.
Nonetheless, there is a voice of caution raised against dismissal as it may lead to the plaintiff’s leverage in publicizing an employment dispute and potentially forcing the parties into dual forums. On balance, proponents for a stay presented arguments around judicial efficiency, stating that dismissing a case would necessitate the legal process to restart in order to address matters not covered during arbitration.
The case is Smith v. Spizzirri, a key case that could provide precedent for the handling of wage and hour disputes in the context of mandatory arbitration provisions.