In Jock v Sterling Jewelers, Inc., (2d Cir. July 1, 2011), Jock initiated an:

Jock's employment agreement included an arbitration clause providing that "[t]he arbitrator shall have the power to award any type of legal or equitable relief that would be available in a court of competent jurisdiction."

After the district court granted a motion to stay the litigation, the parties submitted to the arbitrator the question of whether the arbitration agreement permitted or prohibited class arbitration. The arbitrator found that there was no mention of class claims in the agreement and relied on Ohio law to construe the absence of an express prohibition against class arbitration against the drafter, Sterling Jewelers. The arbitrator concluded that the contract did not prohibit class arbitration and allowed the parties to move in district court to confirm or vacate the award.

The district court vacated the award, relying on the Federal Arbitration Act (FAA), which allows a court to vacate an arbitral award when arbitrators exceed their powers. The district court found that the arbitrator had exceeded her powers by permitting class arbitration because the record provided no support for an implied agreement to allow class arbitration.

The Second Circuit Court of Appeals reversed the district court decision and ordered that the arbitrator's decision be confirmed. The court explained that the relevant question before the court was whether the arbitrator had power to reach the issue and not whether the arbitrator made the correct decision on that issue. An arbitrator can only exceed his powers by deciding issues beyond what was submitted to him or deciding issues clearly prohibited by the agreement or by law. Instead of deciding on these limited grounds, the district court improperly "re-examined the record to determine the question that the arbitrator had already decided."

Here, the parties clearly submitted to the arbitrator the issue of whether the agreement allowed class arbitration. Thus, even though the agreement did not expressly allow class arbitration, the arbitrator was within her authority when deciding that the parties manifested intent to allow for class arbitration. This was because that was the issue properly placed before the arbitrator by the parties. Further, Ohio law provided a "colourable justification" for the arbitrator's decision.

This decision demonstrates the limited nature of a court's review of arbitral awards and the narrow grounds on which a court will vacate an arbitrator's decision when the arbitrator is deciding a question properly before him.