Henry Schein Inc. v. Archer and White Sales Inc.
Issues
Does an arbitration agreement containing a provision that excludes certain claims from arbitration negate a provision in the same agreement that delegates the question of whether an issue should be heard by an arbitrator, rather than a court?
This case asks the Supreme Court to consider whether an arbitration agreement that incorporates the American Arbitration Association’s (“AAA”) rules delegates the question of arbitrability to the arbitrators, in light of an express exclusion clause for injunctive relief, where the plaintiff sought both damages and injunctive relief. The arbitration agreement at issue in this case includes a “carve-out” provision excluding from arbitration any claims seeking injunctive relief. Rule 7(A) of the AAA’s rules states that the arbitrator has the power to rule on the arbitrability of any claim or counterclaim. Petitioner Henry Schein, Inc. argues that the incorporation of the AAA rules “clearly and unmistakably” delegates all questions of arbitrability to the arbitrator, and that, because some issues are delegated to the arbitrator, the presumption of arbitrability should be read to delegate to the arbitrator the question of the application of the exclusion clause. On the other hand, Respondent Archer and White Sales, Inc. contends that the question of arbitrability should remain for the court to decide because of the explicit carve-out exemption. The outcome of this case has heavy implications for the efficiency and fairness of dispute resolution.
Questions as Framed for the Court by the Parties
Whether a provision in an arbitration agreement that exempts certain claims from arbitration negates an otherwise clear and unmistakable delegation of questions of arbitrability to an arbitrator.
The dispute in this case originates from 2016. Respondent Archer and White Sales, Inc. ("Archer") is a distributor of dental equipment, purportedly nationally recognized for its low prices and quality service. Archer & White Sales, Inc. v. Henry Schein, Inc., (E.D. Tex. 2017) at 1. Archer competed directly against Petitioner Henry Schein, Inc. ("Henry Schein"), the country’s largest distributor of dental equipment.
Edited by
Additional Resources
- Hadassah Karp, A Look Ahead: Henry Schein v. Archer & White, Fordham Journal of Corporate and Finance Law (Nov. 12, 2020).
- Gilbert A. Samberg, Arbitrability, Delegation, Carve-outs and Estoppel: SCOTUS Says “Welcome Back, Henry Schein”, National Law Review (Aug. 31, 2020).
- Russ Bleemer & Heather Cameron, Supreme Court Returns Schein to Its Docket, with a Focus on Arbitrability, CPR Speaks (June 15, 2020).