Arbitrators Usually Have No Obligation to Give Reasons for an Award

Normally, arbitrators have no obligation to give reasons for an award. United Steelworkers of Am. v. Enter. Wheel & Car Corp., 363 U.S. 593 (1960). As the Fourth Circuit, in MCI Constructors v. Greensboro, 610 F.3d 849, 862–63 (4th Cir. 2010), has noted:

“It is well settled that arbitrators are not required to disclose the basis upon which their awards are made and courts will not look behind a lump-sum award in an attempt to analyze their reasoning process…United Steelworkers…v. Enter…., 363 U.S. 593, 598… (1960); …Remmey v. PaineWebber…., 32 F.3d 143, 151 (4th Cir.1994) (`[A]rbitrators need not state reasons for reaching a particular result’); In re Arbitration…Under Grain Arbitration Rules, 867 F.2d 130, 135 (2d Cir.1989) (`[A]rbitrators may render a lump sum award without disclosing their rationale for it’….Sargent v. Paine Webber…., 882 F.2d 529, 532 (D.C.Cir.1989) (`We reject the idea that a lump-sum award can be rejected for want of explanation (or, what is in effect almost the same thing, remanded for an explanation) in the absence of facts…that…arbitrators committed…error justifying vacation of the award’).” 

Usually, an arbitration award is not invalid because it denies “all” claims but omits reference to a specific claim or claims. E.g., Remmey v. PaineWebber, 32 F.3d 143, 150–51 (4th Cir.1994)(“Remmey’s… argument…fails. The…ruling states…`All Claims…shall be and are hereby dismissed in all respects.’ This statement…  could hardly be more final and definite…Antwine v. Prudential Bache Sec., Inc., 899 F.2d 410, 413 (5th Cir.1990) (holding that a similar award satisfied the `mutual, final and definite’ requirements). That the arbitrators…did not mention all of Remmey’s claims is of no moment…. [T]he Supreme Court has held that arbitrators need not state reasons for reaching a…result…United Steelworkers…v. Enterprise…., 363 U.S. 593, 598…(1960). [This] §10(a)(4) argument [is]…merely a final attempt to secure a second shot at a recovery.”); Rollins v. Prudential, 10 F. App’x 510, 512 (9th Cir. 2001)(“Considering…the…statement that `All Claimant’s claims are denied in their entirety’ and that `the undersigned arbitrators have decided in full and final resolution of the issues submitted for determination,’ it seems clear that the arbitrators considered and denied all of Rollins’ claims….Accordingly, we conclude that the arbitrators’ failure to list the FMLA claim specifically…does not…justify vacating the arbitration award”). E.g., American Arbitration Association (“AAA”) Award Preparation Fact Sheet (Awards “generally” have a part “declaring that the award is in full settlement of all claims and counterclaims submitted to the arbitration,” and “in domestic commercial arbitrations, the AAA does not encourage commercial arbitrators to write opinions which give their reasons for the award”).

Award Preparation Fact Sheet