Earlier this month, the Second Circuit (Jock v. Sterling Jewelers, Inc.) affirmed an arbitrator’s decision, concluding that the arbitrator’s analysis should be upheld even if the District Court disagreed with the legal analysis. Such a decision is entitled to “substantial deference”.

The case rests on the principle that arbitrations are not going to be going to be easily overturned.  But beneath that decision is an extensive discussion (called “dicta” for those legal gurus out there) about what happens when the parties agree to arbitration but are silent in that agreement about whether class-wide relief is available.

As fellow Connecticut employment lawyer, Rick Hayber, points out — it certainly leaves the door open in the Second Circuit to the possibility.  He recommends for lawyers representing employees that they should advance class arbitrations even if the agreement doesn’t explicitly provide for them.

For companies, the opposite is obviously true.  Companies should continue to oppose them. But a better practice is to make sure your arbitration policy and procedure (if you have one) explicitly references class-wide arbitrations and whether they are allowed or not. In the absence of that, a company may be at the mercy of the arbitrator to make the decision.

But note: Even if a class arbitration is permitted, that still does not mean it should proceed. And that’s where to the new Wal-Mart Stores v. Dukes decision may play a role.  Indeed, as the court noted in a footnote:

We further note that the arbitrator’s decision merely permits the plaintiffs to seek class certification; it does not make it a foregone conclusion that a class will be certified. The arbitrator must still consider the propriety of class certification in this case if and when an application to certify a class is advanced. That consideration will no doubt include examination of the problems identified in the dissent regarding the feasibility of class certification in the circumstances presented here. The articulation of the principles set forth in Wal-Mart Stores, Inc. v. Dukes, ___ U.S. ___, 2011 WL 2437013 (June 20, 2011), may well be principles for the arbitrator to consider when she is presented with the employees’ motion actually to certify a class.