Labor & Employment Law

Statute of limitations for vacating an award (ouch)

The Federal Arbitration Act has a three months statute of limitations for moving to vacate an award.

This invites two questions, both of which were answered today in Webster v. A. T. Kearney, Inc (7th Cir 11/02/2007):

• When does the period begin?
• When does the period end?

Webster took his age discrimination and breach of contract case to arbitration, and lost. So he wanted to get a court to vacate the arbitrator's award.

The three months begins:

On January 4 the award was placed in the mail and emailed.
On January 4 the email reached Webster's attorney's computer.
On January 5 Webster's attorney opened the email.
On January 9 Webster's attorney received the award in the mail.

The FAA says the three months begins when the award is "filed or delivered."
The court noted that Webster agreed to use the AAA Rules, including this one: "The parties shall accept as legal delivery of the award the placing of the award or a true copy thereof in the mail."

Aha! The court held that the statutory word "delivered" meant putting the award in the mail, because that's what Webster agreed to.

This way, the court ducked the issue of whether "delivered" normally means when the mail arrives, and the issue of whether "delivered" means when an email comes into one's computer.

The three months ends:

On April 3 Webster filed his motion to vacate.
On April 5 the employer was served.
(Oops, one day after the end of three months.)

The court had to pick between the filing date and the service date.

This was easy. The Federal Arbitration Act says "service of notice." Never mind what the Rules of Civil Procedure say, because the FAA trumps the rules.

In the end, Webster lost because he didn't serve the defendant within three months of when the award was delivered.

Full post as published by Arbitration Blog on November 02, 2007 (boomark / email).