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When an arbitration agreement is broad and it is unclear whether a particular dispute falls within the arbitration agreement, an arbitrator should decide whether the dispute is arbitrable, a state court in Illinois held.
In Carey v. Richards Building Supply Co., No. 2-06-0712, --- N.E.2d ---, 2006 WL 2847394 (Ill. App. Ct. Sept. 28, 2006), Carey brought a claim against Richards, claiming that he had being wrongfully terminated in retaliation for filing for a workers’ compensation claim.
Carey’s employment contract contained an arbitration agreement stating that all claims would be arbitrated except for claims for workers’ compensation. The agreement also stated that an arbitrator would decide all issues of arbitrability.
After determining that the Illinois Arbitration Act governed the parties’ agreement, the Court held that it was without power to decide the arbitrability of Carey’s claim. Under Illinois law, if “the language of the agreement is broad and it is unclear whether the dispute falls within the agreement’s scope, the determination [of arbitrability] should be made by the arbitrator.” Bahuriak v. Bill Kay Chrysler Plymouth, Inc., 786 N.E.2d 1045, 1049 (Ill.App. 2003).
The parties’ agreement was broad because it required arbitration of all disputes except the workers’ compensation claim. Additionally, it was unclear whether the parties’ dispute fell under the workers’ compensation exception because the exception could have been interpreted to only cover claims arising under the workers’ compensation act or could include tort claims related to workers’ compensation. Therefore, the Court remanded the issue of arbitrability to an arbitrator to decide.
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