Labor & Employment Law Daily Wrap Up, ARBITRATION—U.S.: Court that granted stay of arbitration has jurisdiction to superintend arbitration to end, including confirmation or vacatur, (May 14, 2026)

By Ronald Miller, J.D.

Because the original claims were sufficient to establish the district court’s jurisdiction in this case under 28 U. S. C. § 1331, they also established the district court’s authority to resolve the motions to confirm or vacate the arbitral award resolving those claims.

In a unanimous decision, the U.S. Supreme Court held that a federal court that had previously stayed claims in a pending ac­tion under § 3 of the FAA had jurisdiction to confirm or vacate a result­ing arbitral award on those claims as prescribed in § 9 and § 10 of the FAA. A federal court with pre-existing jurisdiction over claims that it stayed pending arbitration under § 3 can adjudicate a § 9 or § 10 motion even if that mo­tion does not present, on its face, an independent basis for federal jurisdiction. Under the rule adopted by the Supreme Court: The FAA requires a stay, rather than dismissal, so that a court that has granted a § 3 stay can superintend the arbitration to the end, including through confirmation or vacatur (Jules v. Andre Balazs Properties , No. 25-83 (U.S. May 14, 2026)).

Discrimination claim. Between 2017 and 2020, the employee worked at the Cha­teau Marmont Hotel in Los Angeles, California. In March 2020, the hotel ended his employment, citing staffing issues related to the COVID–19 pandemic. Thereafter, the employee sued in federal district court in New York, alleging that the employer unlawfully discriminated against him in violation of federal and state law. Citing an arbitration agreement the employee had signed before beginning work, the employer moved to stay federal proceedings pending arbitration un­der § 3 of the FAA. In 2021, the district court held that the arbitration agreement covered the employee’s claims and stayed proceedings.

Arbitration. The employee then commenced arbitration against the employer. In 2023, the arbitrator issued a final award ruling against the employee on all claims. In addition, the arbitrator awarded $34,500 in sanctions against the employee and his attorney for misconduct, including refus­ing to participate in the arbitral hearing on the employee’s claims.

Back in district court the employer moved to confirm the award under § 9. The employee opposed confirmation while cross-moving to vacate the arbi­tral award under § 10. The employee argued that under Badgerow v. Walters, 596 U. S. 1 (2022), the district court lacked jurisdiction to confirm the award because the § 9 and § 10 motions did not present federal questions or satisfy the requirements for diversity jurisdiction, given that the par­ties to the arbitration and award were nondiverse and the amount in controversy was less than $75,000.

The district court disagreed and confirmed the arbitral award. The Second Circuit affirmed. The employee filed a timely petition for a writ of certiorari seeking review of the Second Circuit’s conclusion that Badgerow’s holding is limited to freestanding § 9 and § 10 applications without a pre-existing federal lawsuit.

Pre-existing jurisdiction. This case asked whether a federal court with pre-existing jurisdiction over claims that it stayed pending arbitration under § 3 can adjudicate a § 9 or § 10 motion even if that mo­tion does not present, on its face, an independent basis for federal jurisdiction. The Supreme Court concluded that the answer is yes. “[A] court with the power to stay the action under §3 has the further power to confirm [or vacate] any ensuing arbitration award.”

To start, assessing jurisdiction over a § 9 or § 10 motion in a case originally filed in federal court does not require “looking through” the filed action. Instead, the court may assess its jurisdiction by looking at the suit that is already before it.

Original jurisdiction. Here, the district court had original jurisdiction, under 28 U. S. C. § 1331, over the employee’s federal claims. It was this very jurisdiction that authorized the court to adjudicate the arbitrability of his claims under the parties’ contract to begin with, before staying litigation pending arbitration. Nothing in the FAA eliminated that jurisdiction while the parties arbitrated. So, when the parties returned to court after arbi­tration with § 9 and § 10 motions, the court had the same “jurisdiction to decide the case,” and thus “jurisdiction to decide th[ose] motion[s],” that it possessed from the start.

Because the original claims were sufficient to establish the district court’s jurisdiction in this case under 28 U. S. C. § 1331, they also established the district court’s authority to resolve the motions to confirm or vacate the arbitral award resolving those claims.

Motion to vacate. The parties’ § 9 and § 10 motions required the district court to assess whether there were grounds to va­cate the award. They were thus integral to determining whether the award would continue to serve as a valid defense to the original claims that had been stayed, but were still pending, in district court until the court confirmed the award.

The parties reached a contractual resolution of claims filed in federal court, and the federal court has juris­diction to resolve disputes over that private settlement and embody the settlement in a court order resolving the case.

Under the rule adopted by the Supreme Court: The FAA requires a stay, rather than dismissal, so that a court that has granted a § 3 stay can superintend the arbitration to the end, including through confirmation or vacatur.

The case is No. 25-83.

Judge: Sotomayor, S.

Attorneys: Adam G. Unikowsky (Jenner & Block) for Adrian Jules. Anne Margaret Voigts (Pillsbury Winthrop Shaw Pittman) for Andre Balazs Properties.

Companies: Andre Balazs Properties

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