Arbitration agreements are standard provisions found in many contracts, including employment agreements, waivers and releases, and sales agreements.
The issue of arbitrability frequently arises in litigation. One of the parties will dispute the validity of the arbitration provision or dispute whether the arbitration provision covers the claims at issue. The issue of arbitrability can result in costly litigation before the parties even commence litigating the actual substantive dispute.
Sometimes an arbitration agreement may contain a provision providing who, an arbitrator or a judge, decides the issue of arbitrability. Other times, an arbitration agreement may reference and incorporate a set of arbitration rules, such as the American Arbitration Association (AAA) Rules, which will govern the arbitration. These rules often address whether the arbitrator decides the arbitrability of a dispute. For instance, Rule 7 of the AAA Commercial Rules provides that “[t]he arbitrator shall have the power to rule on his or her jurisdiction, including any objections with respect to the existence, scope or validity of the arbitration agreement or to the arbitrability of any claim or counterclaim.”
Courts have disagreed over the significance and applicability of these provisions, especially where they are only incorporated by reference into the parties’ arbitration agreement. However, the Florida Supreme Court has resolved the issue. Florida is now clear as to who, an arbitrator or a judge, decides the arbitrability of the dispute if the agreement contains a provision, either expressly or by incorporation, empowering the arbitrator to decide the issue of arbitrability.
The issue before the Florida Supreme Court in the case of Airbnb v. Doe involved an arbitration agreement that incorporated by reference to the AAA Commercial Rules into the parties’ agreement. Because the AAA Rules vested the Arbitrator with authority to decide the arbitrability of the matter, the court found that the parties clearly and unmistakably evidenced the parties’ intent to empower an arbitrator, and not the judge, to resolve questions of arbitrability.
Rosenthal Law Group has successfully litigated arbitration issues at trial and appellate levels. Rosenthal Law Group can assist you if you need assistance determining your contract rights, including the arbitrability of a dispute.