Supreme Court Agrees to Hear Arbitration Case

Author: David B. Weisenfeld, XpertHR Legal Editor

While the Supreme Court's decision to delve into the Defense of Marriage Act attracted front-page headlines, the Court quietly agreed the same day to resolve another case of perhaps greater direct import to employment law.

On December 7, the Court said it will hear arguments in the arbitration case of Oxford Health Plans v. Sutter, No. 12-135. At issue is whether a group of more than 16,000 physicians can collectively arbitrate a payment dispute with Oxford Health even though their arbitration agreement did not mention class actions. The physicians claim Oxford refused to make prompt and accurate reimbursement payments for their services.

The case is relevant to HR because a ruling against the physicians likely would make it more difficult for individual employees to band together to bring class action claims against employers in arbitration. The ability to bring such claims as a class has been a hot-button issue both among employees and consumers.

Employers often insert mandatory arbitration clauses into employment contracts to compel arbitration of individual disputes, but have opposed allowing class arbitrations unless the parties have explicitly agreed via contract.

In 2010, the Supreme Court held that the Federal Arbitration Act does not permit class arbitrations when an agreement is silent on the subject in Stolt-Nielsen v. Animal Feeds Corp., +130 S.Ct. 1758. Oxford Health hopes the Court's decision to hear its appeal is a possible signal that the justices will view its case in a similar fashion.

Arguments will be heard in the spring with a decision expected by June 2013.

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Investigations and Litigation > Arbitration