A court cannot restrict an arbitrator's authority to reconsider a prior decision under the doctrine of functus officio if the parties to the dispute included a clause in their arbitration agreement expressly permitting an arbitrator to reconsider a prior decision, according to the Ninth Circuit Court of Appeals.

In Veliz v. Cintas Corp., No. 07-15009, 2008 WL 1696949 (9th Cir. Apr. 8, 2008), Veliz and Cintas proceeded to arbitration. The arbitrator issued an award, but the district court remanded the award for clarification, holding that the arbitrator had improperly redetermined an issue previously decided while issuing the award. Under the doctrine of functus officio, held the district court, the arbitrator could not reconsider one of the elements of the award. The arbitrator clearly stated that he wished to reconsider this element, but nevertheless complied with the district court's order.

On appeal, the Court found that the district court had erred in prohibiting the arbitrator from reconsidering his award. Because four of the five arbitration agreements that governed the resolution of Veliz's claims contained clauses expressly allowing the arbitrator to reconsider his prior rulings, the Court held the doctrine of functus officio was inapplicable and remanded the matter for the arbitrator's de novo reconsideration.