SCOTUS: Arbitrate Now Or Forever Hold Your Peace

• Published date: 29 June 2022
• Subject Matter: Litigation, Mediation & Arbitration, Arbitration & Dispute Resolution
• Law Firm: Butler Snow LLP
• Author: Victoria Giese

Believe it or not, our Supreme Court justices can unanimously agree on some things. For example, all nine justices were on board to resolve a circuit split regarding waiver of an arbitration agreement. Companies that include arbitration agreements in their contracts should be aware of the Court's recent decision Morgan v. Sundance, Inc., which limits a litigant's options if it wants to avoid waiving its right to arbitrate.

Before the Court decided Morgan, nine federal circuits invoked the Federal Arbitration Act's ("FAA") "strong policy favoring arbitration" to support an arbitration-specific waiver rule. Under that rule, a party waived its contractual right to arbitration if:

(1) it knew of the right;

(2) it acted inconsistently with that right; and

(3) it...