Sunday, December 1, 2013

Brook v. Peak International, Ltd. case brief

Brook v. Peak International, Ltd. case brief summary
294 F.3d 668 (2002)

Plaintiff employee, president of defendant employer, sued after he was fired. The United States District Court for the Western District of Texas held that the arbitrator selected by the American Arbitration Association (AAA) was powerless to decide the dispute because the AAA did not follow the selection procedure in the employment agreement, and vacated the arbitration award pursuant to 9 U.S.C.S. § 10(a)(4). The employee appealed.


  • The dispute concerned severance benefits. 
  • The court held that to state that the AAA failed to follow the simple selection procedure in employment agreement was insufficient: the AAA flouted the prescribed procedures and ignored complaints from both sides about the irregular selection process. 
  • The AAA's departure from the procedure was utterly unwarranted. 
  • Because arbitration is a creature of contract, the AAA's departure from the contractual selection process fundamentally contradicted its role in voluntary dispute resolution. 
  • The AAA was required to follow the procedures, under 9 U.S.C.S. § 5. 
  • However, the president never objected, and objections to the composition of arbitration panels must be raised at the time of the hearing. 
  • His failure to object at the hearing constituted waiver. 
  • He did not have to exhaust all of the described avenues of objecting to the arbitrator selection process, but as was done in the cases on which he relied, he had to make plain and timely his exact objection so that a responsible party--whether the AAA or the arbitrator or a federal court--could have enforced the agreement.

The judgment of the district court was reversed and the judgment enforcing the arbitration award remanded.

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