The contractual right to compel arbitration is among litigators’ most important tools. A well-written arbitration agreement can reduce a company's risks of participating in costly class or consolidated actions, litigating in prejudicial forums, and having confidential information publicly filed.
But arbitration rights can be waived if a company does not diligently pursue arbitration. Under the U.S. Supreme Court's recent decision in Morgan v. Sundance, Inc., companies now risk unintentionally waiving arbitration rights. 142 S. Ct 1708 (2022). In light of the Morgan decision, legal counsel and parties should reexamine the legal landscape around waiver of arbitration rights to ensure that this risk is fully accounted for when making strategic litigation decisions.
To that end, this article reviews the changes following Morgan and the key considerations around what parties should and should not do to preserve their arbitration rights.