In Rent-A-Center v Jackson, 561 U.S. 63 (2010), the US Supreme Court issued a decision limiting judicial review of arbitral agreements. The court held 5-4 that where an arbitral agreement contains a "delegation provision", a clause delegating the power to determine the enforceability of the arbitral agreement to the arbitrator, a court may step in to decide enforceability only if a party makes a specific challenge to the delegation agreement. If a party challenges the arbitration agreement as whole, the arbitrator will decide enforceability. Justice Scalia authored the majority opinion, joined by Chief Justice Roberts and Justices Kennedy, Thomas, and Alito. Justice Stevens authored the dissent, joined by Justices Ginsburg, Breyer, and Sotomayor.

The majority followed and extended the 1967 decision in Prima Paint Corp. v Flood & Conklin Mfg. Co., 388 U.S. 395 (1967). In that case, the court held that an arbitral agreement is enforceable even if the contract containing it is tainted by fraud so long as the allegation of fraud is not specific to the arbitral agreement. In Rent-A-Center, Jackson argued that the court should not enforce the delegation agreement in an arbitral agreement he concluded with Rent-A-Center, his employer, because the arbitral agreement was unconscionable. He made claims specific to the arbitral agreement, but did not single out as unconscionable the delegation provision within the arbitral agreement. Based on Prima Paint, the unchallenged delegation provision was considered a separate arbitral agreement enforceable even if the greater arbitral agreement was unconscionable.

The court acknowledged that, unlike Prima Paint, this case involved an underlying contract that was itself an arbitral agreement, but held that the distinction made no difference. An arbitral agreement may contain numerous mini-arbitral agreements (for example, separate agreements to arbitrate issues A, B, and C) which may be severed and enforced even if the other mini-agreements or the agreement as a whole are void.

The dissent countered that the majority unwisely extended Prima Paint, which likely was erroneously decided. The dissent argued that the arbitration agreement did not "clearly and unmistakably" evince the parties' intent to submit the question of the enforceability of the arbitral agreement to the arbitrator under First Options of Chicago, Inc. v Kaplan, 514 U.S. 938 (1995) - a conclusion that the majority rejected in a footnote.

The court's decision is a victory for businesses that favour arbitration to litigation of complaints by consumers and employees, but its impact is uncertain. The decision may be limited to situations where an arbitration agreement is separate from a main contract, such as is frequently found in the employment context, or it may apply more broadly. Regardless, it is likely that standard form contracts will increasingly contain delegation provisions, which may be insulated from judicial review because they are difficult to challenge in themselves.