Fourth Circuit Concludes Waiver of Arbitration Appellate Review Binding | Small


Employers concerned about the risks and expense of employment litigation have increasingly forced their employees to agree to arbitration in the event of a dispute. However, even after the publication of the arbitrator’s final decision, court intervention may still be necessary. At the very least, the tribunal can effectively enforce an arbitration award, while the arbitrator cannot. In addition, the losing party to the arbitration may seek to set aside the arbitrator’s decision on limited grounds, or request a review of the district court’s decision by filing an appeal with the court of appeal.

On April 8, 2021, the US Court of Appeals for the Fourth Circuit, in Beckley Oncology Associates v. Albumasmah, examined the extent to which the courts could be involved in reviewing an arbitrator’s decision. In a question of first impression, the Fourth Circuit held that appeal waivers in arbitration agreements are enforceable, as long as the agreement allows for initial consideration by the district court.


In 2012, Beckley Oncology Associates (BOA), a cancer treatment practice, hired the defendant as a medical oncologist. The employment contract contained an arbitration provision stating, among other things, that the arbitrator’s decision “shall be final and final and enforceable in any court of competent jurisdiction without any right of judicial review or appeal”. The doctor’s employment at BOA ended in 2015. A dispute arose over the size of a profit-sharing bonus. The parties proceeded to arbitration. The arbitrator ultimately ruled that BOA owed the doctor approximately $ 170,000 in compensation for the premium that had been denied. The BOA subsequently asked the United States District Court for the Southern District of West Virginia to set aside the arbitration award on the grounds that the arbitrator had disregarded the plain language of the employment contract. The district court disagreed and upheld the arbitrator’s decision. BOA appealed the decision to the Fourth Circuit.

The decision of the fourth circuit

The Fourth Circuit ruled that the parties can agree to waive the appellate review of an arbitrator’s decision, provided the arbitration provision allows the district court to conduct a preliminary review. In reaching this decision, the Fourth Circuit relied on a decision of the Tenth Circuit, in which the court held that a provision prohibiting appellate review, but not the district court, is “a compromise whereby the litigants exchange the risk of a prolonged examination in appeal against one. opportunity to shoot in the district court. Further, the Fourth Circuit took note of a ruling from the Ninth Circuit, which concluded that “[p]the parties authorized to contractually eliminate any judicial review arbitral awards would not only be contrary to the FAA text [Federal Arbitration Act], but would also thwart Congress’ attempt to guarantee a minimum level of due process for parties to arbitration. In the dispute between BOA and the doctor, because the parties used the language “without any right of judicial review or appeal” in their arbitration provision, the parties ensured that the trial court reconsidered the arbitrator’s decision – either confirming or rejecting the award – would be the last word.

In addition, the Fourth Circuit noted that appellate review is routinely canceled in other contexts, such as criminal plea agreements, “where the accruals, i.e. years of lost freedom, are much higher. than the pecuniary indemnity in question here. ” The Fourth Circuit explained that “[i]While defendants can waive basic constitutional rights such as the right to counsel or the right to a jury trial, they are certainly not precluded from waiving procedural rights granted by law. The Fourth Circuit recognized that while the language of the FAA provides that a party “may” appeal an order upholding or denying an arbitration award, nothing in the law prevents an express waiver of that appeal.

The Fourth Circuit appears to find common ground in allowing an appeal-level waiver, if there has been an initial review by the district court, to ensure due process rights while respecting the decision. parties to seek another place for litigation. The Fourth Circuit notes that the scope of judicial review of arbitral awards is already limited in that “the jurisdiction of the courts is not to determine the merits of the dispute between the parties, but rather to determine only whether the arbitrator has [their] work – not so [they] did it well, correctly or reasonably, but simply if [they] did so. “As a result, the Fourth Circuit held that” a contractual provision purporting to prohibit a district or circuit court from reviewing an arbitrator’s decision on the merits is essentially meaningless, since the FAA excludes any but the most limited review, ”but can promote the goals of FAA and arbitration, in general, saving parties the time and costs associated with litigation.

Implications for employers

The main takeaway from the Fourth Circuit decision is that circuit employers can agree to waive appellate review, and instead limit the review of arbitral awards by district courts. Employers should, however, consider the advantages and disadvantages associated with such an approach. For example, although circumventing the right of appellate review would inevitably lead to a reduction in time and costs spent, the employer may feel uncomfortable having only a limited “one-stop-shop” in court. district. However, in practice, although appellate review offers employers another chance to overturn an unfavorable award, in practice such reversals are rare. Employers should carefully consider whether and how to develop arbitration agreements as a result of this decision.

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