Jay-Z’s Fight against Lack of Diversity in Arbitration
Blog Post written by Milán Bánhegyi[1]
Jay-Z’s lawsuit has highlighted the problem that arbitrators are predominantly white and male in most western societies. Jay-Z, the internationally famous rapper, who needs no introduction, has successfully stalled his private arbitration between his entertainment company, Roc Nation and a clothing company called IconixBrand Group. He has done so by filing a petition in the Manhattan Supreme Court claiming successfully that lack of African-American arbitrators impede his equal opportunity in the arbitration proceeding since he could be subjected to ‘unconscious bias’. Simply put, his inability to find an African-American Arbitrator to hear his trademark dispute is unfair and discriminatory under New York’s state constitution and New York City human rights law.
The legal battle arose from Jay-Z’s 2007 sale of his clothing line, Rocawear, toIconix Brand Group. In May 2017, Iconix sued Jay-Z’s Roc Nation for allegedly breaching the terms of their 2007 sales agreement by starting a new line of baseball caps. Iconix claims that it paid $204 million for certain Roc Nation intellectual property and thus, the Roc Nation’s new line of baseball caps undermines the 2007 deal. Jay-Z argues that the contractual agreement only applies to Rocawear and it does not apply to Roc Nation.Therefore, in October 2017, Roc Nation did not just deny any wrongdoings, but it countersued Iconix for breach of implied license. At this point of the stalemate of the lawsuits, both parties agreed to enter into private arbitration.
To begin the process of Arbitration, the American Arbitration Association (AAA) provided the parties with a list of potential arbitrators from which they must eliminate arbitrators until they arrive at the one they prefer. Jay-Z’s legal team said that during the selection process, the artist was not able to identify any African-American arbitrators on the list for ‘large and complex cases’. The AAA’s expanded list has 200 potential arbitrators among which there are only three African-Americans, one of whom has a conflict of interest. Jay-Z argues that the remaining two candidates were no choice at all and that the lack of African-American arbitrators in the case puts him at a disadvantage.
The Manhattan Supreme Courtupheld the petition and halted the arbitration until mid-December. Neither Iconix nor AAA commented on the decision of the court.
On December 12, 2018, Jaz-Z withdrew his request for the temporary stay of the arbitration. Jay-Z said that the AAA has agreed to address his concerns about diversity in arbitration. Some say that his motion was a “historic” moment and is still a victory for everyone in light of a better, more diverse future. Even though he withdrew his case in court, it still has created awareness and emphasis on the need for diversity in arbitration.
For more details:
o Here is the original petition of Jay-Z in the Supreme Court of the State of New York. Click here.
o Please Click herefor Jay-Z’s full letter on discussions with AAA after this matter became public.
Notes:
- The filings did not cite any legal precedent regarding the race of arbitrators.
- The closest ruling dates back to 1986 supreme court decision Batson v. Kentucky, which established that in criminal trials the prosecutors are not allowed to eliminate jurors strictly on the basis of race.
- This rule has later been extended to genders in J.E.B. v. Alabama.
[1]Milan Bánhegyi is a 4th year student following the course ‘International and European Law’, specialized in Commercial Law, with great exchange experience from China. He is an active member of the Lectoraat Multilevel Regulation.