Labor & Employment Law

Supremes vacate ruling that nonsignatories may not enforce arbitration pact

The U.S. Supreme Court, in a summary disposition, vacated and remanded to the Sixth Circuit decision in in Kimberlin v Renasant Bank (Dkt No 08-816) for further consideration in light of the Supreme Court's Court?s May 4, 2009 decision, Arthur Andersen LLP v Carlisle ___U.S.___(May 4, 2009).

There, the court by a vote of 6-3 opinion held a litigant who was not a party to an arbitration agreement may invoke Sec. 3 of the Federal Arbitration Act to compel arbitration if applicable state law would allow enforcement of contracts by (or against) a nonsignatory, through assumption or third-party beneficiary theories, for example.

Thus, the Sixth Circuit erred in holding that Sec. 3 relief is categorically unavailable to nonsignatories.

Mitchell H. Rubinstein

Full post as published by New York Public Personnel Law on June 26, 2009 (boomark / email).