Four recent decisions from the U.S. Court of Appeals for the Second Circuit highlight the care organizations must take when selecting arbitration procedures, designing the format and wording of arbitration clauses, and formulating strategy in litigation to compel arbitration. Below, we review those cases and outline several considerations for organizations when evaluating legal strategies related to arbitration.
Flores v. N.Y. Football Giants, Inc.
In Flores, No. 23-1185-cv, 2025 WL 2349199 (2d Cir. Aug. 14, 2025), a racial discrimination claim by a football coach on behalf of a putative class against the National Football League (“NFL”) and certain member teams, the NFL sought to compel arbitration pursuant to the coach’s employment agreements and the NFL Constitution, which places the “full, complete, and final jurisdiction and authority to arbitrate” disputes in the hand of the NFL Commissioner. The trial court granted the motion to compel as to some of the teams but denied the motion as to NFL and the other teams; the Second Circuit affirmed. The NFL and the relevant teams have several months in which to petition the Supreme Court for discretionary review.
The Second Circuit made two key holdings in its decision. First, it determined that the relevant arbitration processes, the procedures and outcomes of which were solely in the discretion of the NFL Commissioner, “fail[ed] to provide an independent arbitral forum for bilateral dispute resolution” and did not sufficiently detail “the procedure to be used in resolving the dispute.” Based on these perceived deficiencies, and those concerning the selection of an ad hoc arbitrator by the NFL during litigation, the Second Circuit determined that the relevant contractual language was not actually an arbitration agreement and thus did not enjoy the presumption of enforceability or forum for compelling arbitration provided by the Federal Arbitration Act (“FAA”). Second, the Second Circuit held that the arbitration clause was void regardless of the application of the FAA. The Court invoked the “effective vindication” doctrine, which prevents parties from prospectively waiving their statutory rights when agreeing to arbitration clauses, the right here being access to an arbitral forum in which to bring his racial discrimination claim.
Davitashvili v. Grubhub Inc.
In Davitashvili, 131 F.4th 109 (2d Cir. 2025), the Second Circuit turned its attention to the formatting and scope of a consumer arbitration clause after users of Grubhub, Postmates, and Uber Eats brought suit for alleged antitrust violations and the defendants moved to compel arbitration. After the trial court denied the motions in full, the Second Circuit directed that the claims against Grubhub need not go to arbitration, but that an arbitrator was to make that decision as to the claims against Postmates and Uber Eats. Grubhub did not seek Supreme Court review of this decision.
To decide whether the plaintiffs assented to those terms when they placed orders, the Second Circuit began its analysis by examining how Grubhub presented its arbitration clauses to consumers; the plaintiffs did not dispute that they had agreed to the arbitration clauses of Postmates and Uber Eats. The Court ultimately determined that the presentation of the arbitration clause on both the Grubhub mobile app and website were sufficient to provide consumers with notice of the clauses. Judge Myrna Pérez, writing for herself only however, indicated that Grubhub’s presentation of its arbitration clause may be at the bounds of what was legally permissible, given how “chaotic” Grubhub’s web page was and how it was only “marginally less cluttered” than a web page that was found not to provide sufficient notice of its arbitration clause.
Next, the Court held that Grubhub’s arbitration clause placed the determination of whether the present dispute was arbitrable at all in the hands of the trial court, rather than an arbitrator. Because of different language in the Postmates and Uber Eats clauses, and because the plaintiffs had failed to show these “delegation clauses” were themselves unenforceable, the Second Circuit determined that the question of the arbitrability of the claims against these two defendants could be decided by an arbitrator instead of a court.
Finally, the Second Circuit held that Grubhub’s arbitration clause did not cover plaintiffs’ antitrust claims because, it reasoned, antitrust claims were not sufficiently related to the relationship between Grubhub and the plaintiffs. Judge Richard J. Sullivan dissented from this holding, arguing that the use of Grubhub by the plaintiffs was related to Grubhub’s market share and thus the plaintiffs’ antitrust claims.
Sudakow v. CleanChoice Energy, Inc.
Sudakow, No. 24-1988, 2025 WL 2457656 (2d Cir. Aug. 27, 2025), like Davitashvili, concerns the presentation of an arbitration clause. A consumer sued CleanChoice Energy, an energy supplier, in a class action alleging breach of contract and deceptive business practices. After CleanChoice moved to compel arbitration, the trial court denied the motion and the Second Circuit affirmed. CleanChoice will have the opportunity to petition for Supreme Court review.
In this case, the consumer signed an Enrollment Agreement that did not contain an arbitration clause and that indicated it could only be unilaterally amended by CleanChoice with 30 days’ notice and after an applicable change in law. Several weeks after it received the consumer’s signature, CleanChoice mailed her a Welcome Package and Subsequent Terms, the latter of which contained an arbitration clause. The Second Circuit observed that neither the package’s envelope nor its cover letter mentioned the Subsequent Terms, and that the consumer never signed the Subsequent Terms.
The Second Circuit held that these circumstances did not provide the consumer with inquiry notice of the arbitration clause within the Subsequent Terms document, as required by New York law. This was because the Subsequent Terms were presented too far from the moment and place where the consumer signed the Enrollment Agreement and because the arbitration clause was not presented in a conspicuous enough manner. It further held that the consumer never assented to the Subsequent Terms because they invited a signature, the Enrollment Agreement had not indicated a possibility that the Subsequent Terms would be sent so soon, and because mere receipt and payment for electricity was not sufficient to constitute assent.
Doyle v. UBS Financial Services, Inc.
Unlike the prior cases, Doyle, 144 F.4th 122 (2d Cir. 2025), focuses on the conduct of litigants while attempting to compel arbitration, rather than arbitration clause or procedures themselves. In Doyle, plaintiffs brought claims against UBS and certain individuals under the federal Investment Advisors Act and state law related to management of a trust. One of the individual defendants moved to dismiss, and UBS and another defendant joined the motion. After the motion was denied, UBS and the other defendant moved to compel arbitration. The trial court denied the motion and the Second Circuit affirmed, finding that the defendants had waived their right to arbitration based on this procedural history. UBS and the other defendant have several months to seek review by the Supreme Court.
In its decision, the Second Circuit determined that a party resisting a motion to compel need not show that a delay in invoking a right to arbitration caused prejudice—a change from prior Second Circuit law. Rather, relying on the recent Supreme Court case Morgan v. Sundance, Inc., 596 U.S. 411 (2022), the Second Circuit held that waiver occurs when a party acts inconsistently with a right to compel arbitration, regardless of the presence of prejudice to the other side. Using this new rule, the Court determined that UBS and the other defendant had waived their rights to arbitration by joining in the motion to dismiss, waiting until after it was decided to file a motion to compel arbitration, and otherwise not mentioning their intention to arbitrate until they filed their motion to compel.
Implications
For organizations that prefer to decide disputes via arbitration, these cases underscore the importance of treating every strategic decision concerning arbitration with care. Flores suggests that those that wish to streamline arbitration procedures should carefully consider applicable law before determining who the ultimate decision maker is on matters of substance and procedure. Davitashvili and Sudakow indicate that courts will continue to scrutinize the presentation of arbitration clauses, and that they are prepared to strike such provisions if the web pages containing them are too cluttered or if the courts are not otherwise convinced consumers have proper notice of the clauses and assented to them. Davitashvili further teaches that the wording of arbitration clauses matters and that an attempt to broadly apply an arbitration agreement may require particularly persuasive advocacy to be successful. Finally, Doyle emphasizes the importance of planning for arbitration early in a lawsuit to ensure that the right to compel arbitration is not waived and to properly account for the changing landscape of federal arbitration law.
Lawyers at Blank Rome have experience in developing arbitration agreements and litigating arbitration proceedings, and they can help guide organizations thinking through these considerations. Blank Rome attorneys with appellate experience are likewise prepared to strategize effective approaches to ongoing arbitration litigation before courts in the Second Circuit and elsewhere.
This article is one in a series of articles written for Blank Rome Appellate Insights: Winning on Appeal - September 2025.
