In May, the U.S. Supreme Court decided an issue that has divided the federal courts of appeals: When claims at issue in a federal court suit are subject to arbitration, does the court have authority to dismiss the action, or should it stay the action pending resolution of the arbitration? In Smith v. Spizzirri (601 U.S. ___ (2024)), the court ruled unanimously that, under the Federal Arbitration Act (FAA), even when all of the claims in a federal court action are subject to arbitration, the court may only stay the action pending resolution of the arbitration and not dismiss it, if one of the parties requests a stay. The Supreme Court also elaborated on the supervisory role of district courts in arbitration.

In Smith, the plaintiffs were current and former delivery drivers who sued their employer in state court in Arizona, alleging multiple violations of federal and state employment laws. After removing the case to federal court in Arizona, the defendants moved to compel arbitration and dismiss the action, claiming that all of the plaintiffs’ claims were subject to mandatory arbitration.