Who Decides "Who Decides"? The Heightened Standard for Arbitrating Arbitrability

In the world of complex commercial litigation, a pivotal question often arises: "who decides whether a claim is arbitrable?" While parties can agree to delegate these "gateway" questions to an arbitrator, the standard for proving such an agreement is exceptionally high. Drawing from the recent Fifth Circuit decision in Aramark Services, Inc. v. Aetna Life Insurance Company, No. 24-40323 (5^th Cir. 2025), this post explores the heightened standard courts apply to determine if parties truly intended to move these threshold decisions away from the courtroom.

The Default: Courts as Gatekeepers

Generally, whether parties agreed to arbitrate a specific dispute is a matter of contract interpretation for the court. Unless the parties clearly and unmistakably prove otherwise, the question of whether they agreed to arbitrate is decided by the court, not the arbitrator.

The Supreme Court established this heightened standard in First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995), ruling that courts should not assume parties agreed to arbitrate arbitrability without "clear and unmistakable" evidence. This principle ensures that courts remain the primary gatekeepers of their own jurisdiction unless a clear alternative intent is shown.

Defining "Gateway" Questions

Under the Federal Arbitration Act (FAA), parties can enter into an "antecedent agreement" to arbitrate gateway issues, such as whether a specific agreement covers a particular controversy. The Supreme Court has affirmed this in cases like Howsam v. Dean Witter Reynolds, Inc. 537 U.S. 79, 83 (2002) and Rent-A-Center, West, Inc. v. Jackson, 61 U.S. 63, 69-69 (2010).  However, because of the potential for unexpected shifts in jurisdiction, these delegation agreements are subject to the First Options "clear and unmistakable" hurdle.

Lessons from Archer & White Sales v. Henry Schein

A significant development in this area of law came through the litigation in Henry Schein, Inc. v. Archer & White Sales, Inc., 935 F.3d 274, 278 (5^th Cir. 2019), cert. granted, 141 S.Ct. 107 (2020, and dismissed as improvidently granted, 141 S.Ct., 656, (2021). While the Supreme Court's initial ruling in that case eliminated the "wholly groundless" exception to arbitration, it reiterated that the language parties agreed to remains the controlling factor.

On remand in Archer, the Fifth Circuit held that the heightened standard was not met because the contract included a "carve-out" provision. The court found that when an arbitration clause contains an exclusion for certain types of relief (like injunctive relief) within the same sentence as the general delegation, it muddies the clarity of the parties' intent to delegate arbitrability. In such instances, the incorporation of American Arbitration Association (AAA) rules—which usually suggests delegation—is not dispositive.

Applying the Standard in Aramark v. Aetna

In Aramark v. Aetna, the Master Services Agreement (MSA) contained an Exclusionary Clause stating that claims would be settled by arbitration "except for... any other form of equitable relief". This carve-out was within the same sentence as the arbitration requirement.

The Fifth Circuit, citing its previous holding in Archer, emphasized that this arrangement failed the "clear and unmistakable" test. The court reasoned:

• The parties could have unambiguously and expressly delegated the interpretation of the carve-out to the arbitrator but chose not to do so.

• The placement of the exclusionary clause mirrored the organization in Archer, where the delegation of gateway issues was found insufficient.

Because Aetna could not meet the heightened standard, the court retained the power to decide arbitrability. It ultimately found that Aramark’s ERISA claims were equitable and therefore fell under the carve-out, directing the case to proceed in federal court rather than arbitration.

Key Takeaway for Practitioners

The Aramark decision reinforces that plain language and syntax are paramount. To satisfy the "clear and unmistakable" standard established by the Supreme Court, parties must ensure that delegation clauses are not "muddied" by poorly placed exclusions. If a carve-out is included within the same sentence as the arbitration agreement, courts are likely to maintain their role as the gatekeeper of arbitrability.