{"id":885098,"date":"2015-11-11T11:18:04","date_gmt":"2015-11-11T18:18:04","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=885098"},"modified":"2015-11-11T11:18:04","modified_gmt":"2015-11-11T18:18:04","slug":"ninth-circuit-incorporation-of-the-aaas-rules-is-agreement-to-arbitrate-arbitrability","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/ninth-circuit-incorporation-of-the-aaas-rules-is-agreement-to-arbitrate-arbitrability\/","title":{"rendered":"Ninth Circuit: Incorporation of the AAA\u2019s Rules Is Agreement to \u201cArbitrate Arbitrability\u201d"},"content":{"rendered":"<p>Mark W. Frilot | The Dispute Resolver | November 6, 2015<\/p>\n<p>The Ninth Circuit\u2019s recent decision in <em>Brennan v. Opus Bank<\/em>, \u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00adNos. 13-35580 &amp; 13-35598 (9th Cir. 8\/25\/15) is not a construction case.\u00a0 However, the court\u2019s decision might be pertinent to parties seeking to compel arbitration of construction disputes, particularly disputes arising from contracts that incorporate the <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/arbitration-powers-expanded-in-new-aaa-construction-industry-rules\/\" target=\"_blank\">American Arbitration Association\u2019s (\u201cAAA\u201d) Construction Industry Arbitration Rules and Mediation Procedures (\u201cAAA Construction Rules\u201d)<\/a>.\u00a0 That is because the Ninth Circuit held in <em>Brennan <\/em>that an employment agreement\u2019s express incorporation of the AAA\u2019s Rules in the agreement\u2019s arbitration provision constituted clear and unmistakable evidence that the parties agreed that the arbitrator would determine whether claims were subject to arbitration.\u00a0 In other words, the parties agreed to \u201carbitrate arbitrability\u201d.<\/p>\n<p>The case arose from an employment dispute under an employment agreement that provided that the employer and employee would resolve claims arising from the agreement under the AAA\u2019s Rules.\u00a0 The plaintiff employee, however, claimed that his dispute should be resolved in litigation because the arbitration clause was procedurally and substantively unconscionable and, therefore, unenforceable.\u00a0 The issue the Ninth Circuit faced on appeal was \u201cwho-an arbitrator or a judge-should decide whether the arbitration clause is unconscionable\u201d.<\/p>\n<p>The court first addressed the issue of applicable law.\u00a0 The employee plaintiff argued that state law applied to the issue of arbitrability.\u00a0 The Ninth Circuit disagreed, holding that federal law governed the issue of arbitrability because the <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/scope-federal-arbitration-act-allows-contractor-compel-arbitration\/\" target=\"_blank\">Federal Arbitration Act<\/a> (\u201cFAA\u201d) governs the agreement.<\/p>\n<p>Applying federal arbitration law, the court held that the arbitrator should decide arbitrability because the employment agreement expressly incorporated the AAA\u2019s Rules, which includes a rule that the \u201carbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the \u00bc validity of the <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/how-low-can-you-go-shortening-the-statute-of-limitations-in-arbitration-agreements\/\" target=\"_blank\">arbitration agreement<\/a>.\u201d\u00a0 Particularly, the court held that \u201cincorporation of the AAA rules constitutes clear and unmistakable evidence that the parties agreed to arbitrate arbitrability.\u201d\u00a0 The court did not address the issue of whether the \u201cdelegation provision\u201d that delegates arbitrability issues to arbitrator determination is itself unconscionable because the plaintiff had not urged that the delegation provision itself was unconscionable.<\/p>\n<p>Because Rule 9 of the AAA\u2019s Construction Rules also grants the arbitrator the power to rule on his or her jurisdiction and the existence, scope, or validity of the arbitration agreement, parties could argue that, based on the Ninth Circuit\u2019s decision in <em>Brennan<\/em>, parties to construction contracts that incorporate the AAA\u2019s Construction Rules have agreed to \u201carbitrate arbitrability\u201d.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Mark W. Frilot | The Dispute Resolver | November 6, 2015 The Ninth Circuit\u2019s recent decision in Brennan v. Opus Bank, \u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00adNos. 13-35580 &amp; 13-35598 (9th Cir. 8\/25\/15) is not a construction case.\u00a0 However, the court\u2019s decision might be pertinent to parties seeking to compel arbitration of construction disputes, particularly disputes arising from contracts that&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/ninth-circuit-incorporation-of-the-aaas-rules-is-agreement-to-arbitrate-arbitrability\/\">Continue reading <span class=\"screen-reader-text\">Ninth Circuit: Incorporation of the AAA\u2019s Rules Is Agreement to \u201cArbitrate Arbitrability\u201d<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[41],"tags":[8631,42],"class_list":["post-885098","post","type-post","status-publish","format-standard","hentry","category-arbitration","tag-aaa-construction-arbitration-rules","tag-arbitration-2","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Ninth Circuit: Incorporation of the AAA\u2019s Rules Is Agreement to \u201cArbitrate Arbitrability\u201d - Advise &amp; 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