SW Legal studies in Business

Clock Begins to Run When Notice of Arbitration Award Mailed
Description

Appeals court held that the right of a party to move to vacate an award must be filed within 90 days of when the award is mailed to the parties. That means the day it is placed in the mail, and e-mail, not the day the mail is received or read.

Topic

Alternate Dispute Resolution

Key Words

Arbitration; Award; Vacate; Delivery; Statute of Limitations; Appeal

C A S E   S U M M A R Y
Facts

Webster was a lawyer for A.T. Kearney (part of EDS) for 9 years before he was fired when the legal department was abolished. He sued for age discrimination and breach of his employment agreement, which contained a mandatory arbitration clause. The arbitrator found for his employer and issued the award on January 4, 2006, and mailed the award that day and sent it by e-mail to both parties, which Webster’s attorney received. Webster sued to overturn the award on the ground that the arbitrator exceeded his authority. He filed a motion in federal court on April 3, 2006 and served EDS on April 5. EDS moved to dismiss the action as untimely. The Federal Arbitration Act (FAA) provides that when a party moves to vacate a decision, notice “must be served upon the opposing party or his attorney within three months after the award is filed or delivered.” The trial court held the award was delivered on January 4, the day it was mailed and e-mailed, so the statute of limitations expired on April 4, three months later. Service on April 5 was too late. Webster appealed.

Decision

Affirmed. The arbitration award was delivered, and the clock began to run under the FAA for filing a motion to vacate, on the day the arbitrator placed the award in the mail, not the date the mail was received or the e-mail opened. The American Arbitration Association uses rules that equate legal delivery with placement in the mail.

Citation

Webster v. A.T. Kearney, Inc., 507 F.3d 568 (7th Cir., 2007)

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