Second Circuit Holds That Company’s Refusal To Pay Arbitration Fees Does Not Constitute A “Failure, Neglect, Or Refusal To Arbitrate”

What happens when an arbitration tribunal refuses to administer a case due to a party’s refusal to pay required fees? Can a court compel payment? Not according to the Second Circuit’s recent decision in Frazier v. X Corp., holding that an employer’s refusal to pay JAMS administrative fees did not constitute a “failure, neglect, or refusal to arbitrate” within the meaning of the Federal Arbitration Act. Reversing District Judge Jed Rakoff, the Second Circuit held that discharged employees seeking to arbitrate were required to pursue relief through JAMS, presumably by agreeing to advance fees themselves, or leaving open the possibility that the former employees might choose to bring their claims judicially.