{"id":2420,"date":"2025-09-23T08:29:07","date_gmt":"2025-09-23T12:29:07","guid":{"rendered":"https:\/\/blogs.duanemorris.com\/classactiondefense\/?p=2420"},"modified":"2025-09-23T08:29:08","modified_gmt":"2025-09-23T12:29:08","slug":"second-circuit-rejects-former-employees-attempt-to-seek-review-of-arbitral-fees-dispute","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/classactiondefense\/2025\/09\/23\/second-circuit-rejects-former-employees-attempt-to-seek-review-of-arbitral-fees-dispute\/","title":{"rendered":"Second Circuit Rejects Former Employees\u2019 Attempt To Seek Review Of Arbitral Fees Dispute"},"content":{"rendered":"
\n
\"\"<\/a><\/figure>\n<\/div>\n\n\n

By Gerald L. Maatman, Jr., Andrew Quay, and Eden Anderson<\/strong><\/p>\n\n\n\n

Duane Morris Takeaways: \u00a0<\/strong>A Second Circuit panel of Judges Gerard Lynch, Michael Park, and Beth Robinson reversed <\/a>the Southern District of New York in Frazier v. X Corp., Case No. 24-1948 (2d Cir. Sept. 2, 2025), holding that X\u2019s (formerly Twitter) refusal to pay ongoing arbitral fees did not amount to a \u201cfailure, neglect, or refusal \u2026 to arbitrate\u201d that the district court was empowered to remedy under the Federal Arbitration Act (\u201cFAA\u201d).\u00a0 The Second Circuit explained that under 9 U.S.C. \u00a7 4, district courts may only address a narrow category of disputes limited to whether arbitration must occur between particular parties over particular issues.\u00a0 The decision follows related precedent set by the Third, Fifth, Ninth, and Eleventh Circuits and makes clear that a party\u2019s decision not to abide by the procedural determinations of an arbitrator or arbitral body does not empower a district court to intervene and review.<\/em><\/p>\n\n\n\n

The decision is an important primer for corporate counsel in handling disputes over ongoing arbitral proceedings.<\/em><\/p>\n\n\n\n

Case Background<\/strong><\/p>\n\n\n\n

Plaintiff-Petitioners, seven former employees of Twitter, signed arbitration agreements committing them to resolve any employment-related disputes in binding individual arbitration.  The employees filed arbitration demands following their termination, believing that they had been denied severance and had been illegally discriminated against, among other claims.  After making certain payments of arbitral fees, Twitter asserted that the arbitration agreements required that the fees be apportioned equally between it and the former employees.  The agreements called for a pro-rata split of arbitral fees but incorporate by reference Judicial Arbitration and Mediation Services\u2019 (\u201cJAMS\u201d) rules and policies, which required Twitter to pay all but the case initiation fees.  The employees sued to compel arbitration under 9 U.S.C. \u00a7 4, arguing that by refusing to pay the fees allocated to it by the arbitral body, Twitter was \u201crefus[ing] to arbitrate\u201d in accordance with the arbitration agreements.<\/p>\n\n\n\n

At issue before the Second Circuit was whether Twitter\u2019s refusal to pay ongoing arbitral fees constituted an outright refusal to arbitrate that the district court was empowered to remedy under 9 U.S.C. \u00a7 4.  The former employees took the position that by incorporating the arbitral body\u2019s rules in the arbitration agreements, Twitter agreed to be bound by the arbitral body\u2019s initial determination that Twitter was responsible for the disputed fees.  Therefore, the former employees argued, the district court could compel Twitter to pay the disputed fees under 9 U.S.C. \u00a7 4.<\/p>\n\n\n\n

The Decision<\/strong><\/p>\n\n\n\n

The Second Circuit rejected the former employees\u2019 argument.<\/p>\n\n\n\n

It held that a party\u2019s decision not to abide by the procedural determinations of an arbitrator or arbitral body is an intra-arbitration delinquency that arbitral bodies are empowered to manage.  Therefore, the former employees could not use 9 U.S.C. \u00a7 4 as a vehicle to seek judicial review of the arbitral body\u2019s decision not to proceed with the arbitration process.<\/p>\n\n\n\n

Implications Of The Decision<\/strong><\/p>\n\n\n\n

The Frazier<\/em> decision marks another federal circuit keeping the courts out of disputes in ongoing arbitral proceedings over a party\u2019s payment of fees or compliance with arbitral policies. Corporate counsel must consider the limited scope of permitted review under 9 U.S.C. \u00a7 4 when facing disputes in ongoing arbitral proceedings, whether over payment of fees or otherwise.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Gerald L. Maatman, Jr., Andrew Quay, and Eden Anderson Duane Morris Takeaways: \u00a0A Second Circuit panel of Judges Gerard Lynch, Michael Park, and Beth Robinson reversed the Southern District of New York in Frazier v. X Corp., Case No. 24-1948 (2d Cir. Sept. 2, 2025), holding that X\u2019s (formerly Twitter) refusal to pay ongoing … <\/p>\n

Continue reading “Second Circuit Rejects Former Employees\u2019 Attempt To Seek Review Of Arbitral Fees Dispute”<\/span><\/a><\/p>\n","protected":false},"author":575,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[41],"tags":[],"ppma_author":[7,147,92],"class_list":["post-2420","post","type-post","status-publish","format-standard","hentry","category-arbitration-issues"],"authors":[{"term_id":7,"user_id":575,"is_guest":0,"slug":"gmaatman","display_name":"Gerald L. Maatman, Jr.","avatar_url":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2022\/09\/maatmangerald-100x100.jpg","0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":"","8":""},{"term_id":147,"user_id":742,"is_guest":0,"slug":"aquay","display_name":"Andrew P. Quay","avatar_url":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2026\/03\/quayandrew-100x100.jpg","0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":"","8":""},{"term_id":92,"user_id":651,"is_guest":0,"slug":"eeanderson","display_name":"Eden Anderson","avatar_url":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2023\/07\/andersoneden-100x100.jpg","0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":"","8":""}],"_links":{"self":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts\/2420","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/users\/575"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/comments?post=2420"}],"version-history":[{"count":0,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts\/2420\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/media?parent=2420"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/categories?post=2420"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/tags?post=2420"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/ppma_author?post=2420"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}