FILED 

 U.S. COURT OF APPEALS

 ELEVENTH CIRCUIT 

 MARCH 28, 2003 

 THOMAS K. KAHN 

 CLERK

*

 Honorable Jerome Farris, United States Circuit Judge for the Ninth Circuit, sitting by

designation.

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

________________________

No. 02-12648

________________________

D.C. Docket No. 01-07865-CV-JAL

RUSSELL MUSNICK,

Plaintiff-Appellee,

versus

KING MOTOR COMPANY OF FORT

LAUDERDALE, d.b.a. King Auto Mall,

Defendant-Appellant.

________________________

Appeals from the United States District Court

for the Southern District of Florida

_________________________

(March 28, 2003)

Before CARNES, HILL and FARRIS*

, Circuit Judges.
2

HILL, Circuit Judge:

King Motor Company of Fort Lauderdale appeals the district court’s order

denying its motion to compel arbitration.

I.

Russell Musnick signed an agreement to arbitrate any discrimination claim

he might bring against his employer, King Motor Company of Fort Lauderdale

(“King”). The Arbitration Agreement (the “Agreement”) provides, in part:

The prevailing party shall be awarded costs including

reasonable attorneys’ fees, filing fee, subpoena service

and witness fee, deposition and hearing transcription

costs and similar expenses, but not including expert fees

unless the expert was necessary to establishing or

refuting liability. In cases where a party asserts any

claim, position or defense, which is not substantially

justified by the law or facts, the arbitrator shall award to

the opposing party that party’s reasonable attorney’s fees

incurred as a result of that party’s defending any such

claim, position or defense. 

Some time later, Musnick sued King in the district court, claiming religious

discrimination in violation of Title VII and Florida Statute § 760.10. Pursuant to

the Agreement, King filed a motion to compel arbitration, and stay the judicial

proceedings. Musnick opposed the motion, arguing that the provision in the
1The district court’s reliance on Perez v. Globe Airport Sec. Services, 253 F.3d 1280,

1286 (11th Cir. 2001) in support of its conclusion was misplaced. At the time of the district

court’s decision, we had already vacated the Perez holding. 294 F.3d 1275 (11th Cir. 2002). 

Similarly unavailing is Musnick’s continued reliance on this case. A vacated decision has no

effect whatever. United States v. Sigma Int’l, Inc., 300 F.3d 1278, 1280 (11th Cir. 2002).

3

Agreement awarding costs and fees to the prevailing party rendered it unenforceable.

The district court agreed with Musnick, holding that the Agreement’s “loser

pays” provision denied Musnick a remedy he would have under Title VII if

allowed to proceed under the statute.1

 We review the denial of the motion to

compel arbitration de novo. Paladino v. Avnet Computer Technologies, Inc., 134

F.3d 1054, 1057 (11th Cir. 1998).

II.

Over the last decade or so, the Courts of Appeals were split on the

enforceability of fee-shifting provisions contained in arbitration agreements

providing for mandatory arbitration of employment discrimination claims. At one

point, the Court of Appeals for both the District of Columbia and the Tenth Circuit

refused to enforce such agreements, holding that they effectively denied the Title

VII plaintiff a forum to vindicate his claims. Cole v. Burns Int’l Sec. Services, 105

F.3d 1465, 1484-85 (D.C. Cir. 1997); Shankle v. B-G Maint. Mgmt., Inc., 163 F.3d

1230, 1234-35 (10th Cir. 1999). We, too, had refused to enforce an arbitration

agreement that potentially imposed “high costs” on the employee, holding that
2

In Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001), the Court also made clear that

the FAA applies to all arbitration agreements involving interstate commerce, including

employment contracts, such as the one at issue here. 

4

such an agreement “undermines the policies that support Title VII.” Paladino,

134 F.3d at 1062 (citing Cole as suggesting a per se rule against “fee-shifting” in

such arbitrations).

 On the other hand, the First, Fifth and Seventh Circuits took the position

that the presence of a fee-sharing provision did not automatically render the

agreement unenforceable. Rosenberg v. Merrill Lynch, Pierce, Fenner & Smith,

Inc., 170 F.3d 1, 15-16 (1st Cir. 1999); Williams v. Cigna Fin. Advisors Inc., 197

F.3d 752, 764 (5th Cir. 1999); Koveleskie v. SBC Capital Markets, Inc., 167 F.3d

361, 366 (7th Cir. 1999).

Recently, however, the Supreme Court, in reviewing a case from this circuit,

made clear that the strong federal preference for arbitration of disputes expressed

by Congress in the Federal Arbitration Act (the “FAA”) must be enforced where

possible.2

 In Green Tree Financial Corp.-Alabama v. Randolph, 531 U.S. 79, 121

S. Ct. 513 (2000), the Court rejected our conclusion that an arbitration agreement

that is silent as to fees and costs is unenforceable because the plaintiff “might be

required to bear substantial costs of the arbitration.” See Randolph v. Green Tree

Fin. Corp.-Alabama, 178 F.3d 1149, 1158 (11th Cir. 1999) (emphasis added). The
5

Court concluded that “an arbitration agreement’s silence with respect to such

matters does not render the agreement unenforceable.” Id.

Although acknowledging that, “[i]t may well be that the existence of large

arbitration costs could preclude a litigant . . . from effectively vindicating her

federal statutory rights in the arbitral forum,” id. at 90, the Court held that the

potential financial burden of the Green Tree plaintiff was “too speculative” to

invalidate the arbitration agreement at issue there. Id. at 91. The Court observed

that not only was the agreement unclear as to who would bear the arbitration costs,

but that the plaintiff there supplied only “unsupported statements” regarding the

costs involved. Id. at 91 n. 6. The Court made clear that it is the party seeking to

avoid arbitration who has the burden to show the likelihood of prohibitive costs,

and suggested that, upon a threshold showing, the burden of production of

evidence might shift to the party seeking arbitration to counter that showing. Id. at

92.

Since Green Tree, we have had occasion to revisit this issue. In Bess v.

Check Express, 294 F.3d 1298 (11th Cir. 2002), we recognized that, under Green

Tree, a Title VII plaintiff seeking to avoid his agreement to arbitrate his

discrimination claim by arguing that prohibitive arbitration costs would undermine

his statutory remedy has to demonstrate that he is likely to bear such costs. 294
6

F.3d at 1303. We acknowledged that our analysis in Green Tree, which relied on

the mere possibility of prohibitive arbitration costs, was rejected by the Supreme

Court, and that, absent a record establishing that the plaintiff “likely will incur

prohibitive costs,” an agreement to arbitrate must be enforced. Id. at 1304.

In Bess, the arbitration agreement was silent on the matter of costs and fees. 

Id. at 1303. We held that, under that circumstance, “any discussion of [plaintiff’s]

potential costs . . . necessarily is based on speculation and cannot provide an

adequate basis for concluding that her costs likely would be prohibitively

expensive.” Id. at 1304.

Since Green Tree, all but one of the other Circuits that have reconsidered

this issue have applied a similar case-by-case approach. See Thompson v. Irwin

Home Equity Corp., 300 F.3d 88 (1st Cir. 2002) (adhering to case-by-case

approach predating Green Tree); Blair v. Scott Specialty Gases, 283 F.3d 595, 610

(3d Cir. 2002) (“[T]he mere existence of a fee-splitting provision in an agreement

[does not] satisfy the claimant’s burden to prove the likelihood of incurring

prohibitive costs”); Primerica Life Ins. Co. v. Brown, 304 F.3d 469, 471 n. 6 (5th

Cir. 2002) (adhering to case-by-case approach predating Green Tree); Bradford v.

Rockwell Semiconductor Systems, Inc., 238 F.3d 549, 556 (4th Cir. 2001)

(“appropriate inquiry is one that evaluates whether the arbitral forum in a
3Only one circuit has enunciated a per se rule following Green Tree. Circuit City Stores,

Inc. v. Adams, 279 F.3d 889, 894 n.5 (9th Cir. 2002) (mere presence of fee-shifting provision

invalidates agreement). The Seventh Circuit, which reconsidered the issue in McCaskell v. SCI

Mgmt. Corp., 298 F.3d 677, 680 (7th Cir. 2002), did not decide it, holding that the defendantemployer was bound by its statement during oral argument that the denial of attorney’s fees to a

prevailing plaintiff would be “inconsistent” with Title VII.

7

particular case is an adequate and accessible substitute to litigation, i.e., a case-bycase analysis that focuses, among other things, upon the claimant’s ability to pay

the arbitration fees and costs, the expected cost differential between arbitration

and litigation in court, and whether that cost differential is so substantial as to

deter the bringing of claims”); Burden v. Check into Cash, LLC, 267 F.3d 483, 492

(6th Cir. 2001) (Green Tree requires party resisting arbitration to show likelihood

of prohibitive expenses); Gannon v. Circuit City Stores, Inc., 262 F.3d 677, 683

(8th Cir. 2001) (on remand, district court should consider the plaintiff’s arguments

in light of Green Tree which requires her to show the likelihood of incurring

prohibitive expenses in arbitration); LaPrade v. Kidder, Peabody & Co., Inc., 246

F.3d 702, 708 (D.C. Cir. 2001) (upholding arbitration award requiring the plaintiff

to pay a portion of the fees and costs, noting that the plaintiff had failed to

establish her burden under Green Tree that the award had prevented her from

attempting to vindicate her rights). In all of these cases, the Court of Appeals

either enforced the arbitration agreement, or remanded the case for further factfinding regarding plaintiff’s claim of prohibitive costs.3
4Even the Tenth Circuit’s decision in Shankle can be said to support a case-by-case

approach since, despite articulating what sounds like a per se rule that mandatory fee-splitting

“clearly undermines the remedial and deterrent functions of the federal anti-discrimination laws,”

the court then went on to examine the facts and circumstances of that plaintiff’s ability to pay the

costs of arbitration and invalidated the agreement because he could not afford to pay for access to

the arbitral forum. See Shankle, 163 F.3d at 1235; see also Bradford, 238 F.3d at 555.

8

In view of Bess and the overwhelming consensus among the Circuits,4

 it is

clear that the district court erred in holding that Musnick cannot be compelled to

arbitrate because the “loser pays” provision of the Agreement denies him his

statutory rights under Title VII. After Green Tree, an arbitration agreement is not

unenforceable merely because it may involve some “fee-shifting.” The party

seeking to avoid arbitration under such an agreement has the burden of

establishing that enforcement of the agreement would “preclude” him from

“effectively vindicating [his] federal statutory right in the arbitral forum. " 532

U.S. at 90. Absent such a showing, the agreement may be enforced. Id. at 91

Thus, the question in this case is whether Musnick met his burden under

Green Tree and Bess to demonstrate that he faces such “high costs” if compelled

to arbitrate his claim against King that he is effectively precluded from vindicating

his Title VII rights in the arbitral forum. Green Tree, 532 U.S. at 90; Bess, 294

F.3d at 1304. We hold that he did not.

Under Green Tree, Musnick has an obligation to offer evidence of the

amount of fees he is likely to incur, as well as of his inability to pay those fees. 
9

531 U.S. at 96. See also Blair, 283 F.3d at 607 (“Green Tree placed the initial

burden of proof on the party resisting arbitration to demonstrate that arbitration

would be prohibitively expensive by showing ‘the likelihood of incurring such

costs’”). This Musnick did not do. His affidavit, to which no supplementary

documentation is attached, merely recites that:

I genuinely fear the imposition of attorney’s fees from

Fisher & Phillips, as I am familiar with their billing sent

to King Motors. Fisher & Phillips’ hourly rate is high,

and I imagine it will be higher when billed to an

opponent. . . . I am fearful of a potential attorney’s fee

award against me. . . . I will be unable to pay.

This showing is wholly inadequate to establish that the arbitration would result

in prohibitive costs that force him to relinquish his claim under Title VII. See Blair,

283 F.3d at 610 (“[M]ere existence of a fee-splitting provision in an agreement [does

not] satisfy the claimant’s burden to prove the likelihood of incurring prohibitive

costs under Green Tree”). He has adduced no evidence whatsoever to support this

claim. As a result, the risk alleged by Musnick is simply too “speculative” to render

his agreement to arbitrate unenforceable. Green Tree, 531 U.S. at 91. 

At least one Court of Appeals as well as a number of district courts have

enforced mandatory arbitration of Title VII claims where the agreement contained a

similar “loser pays” provision, holding the claim of prohibitive costs too
5There was an issue as to whether the claimant had signed the agreement in Bess. Our

direction to grant the motion to compel was contingent upon the district court’s finding that he

had. 294 F.3d 1309.

10

“speculative.” See Thompson, 300 F.3d at 91-92; Goodman v. ESPE America, Inc.,

84 Fair Empl. Prac. Cas. 1629 (E.D. Pa. 2001) (citations omitted); DeGroff v.

MascoTech Forming Technologies Fort Wayne, Inc., 179 F. Supp. 2d 896, 910 (N.D.

Ind. 2001); Dowling v. Anthony Crane Int’l, 2001 WL 378838 (D. Virgin Islands

2001); Rajjak v. McFrank and Williams, 86 Fair Empl. Prac. Cas. 737, 4 (S.D.N.Y.

2001); Witz v. Apps, 2000 WL 1720434 (N.D. Ill 2000). As one of these courts

explained:

[A]t this point Plaintiff has not been assessed with any

fees, nor is it certain that he ever will be. Given these

facts, we cannot conclude that the arbitration agreement

constitutes a barrier to vindication of Plaintiff’s rights.

Plaintiff’s speculation about prohibitive costs is just that –

speculation; this is not enough to invalidate an otherwise

enforceable arbitration provision.

Goodman, 84 Fair Empl. Prac. Cas. at 64749. We agree.

The sole remaining issue to be resolved is whether we should remand this case

to the district court for fact-finding on the issue of “prohibitive costs.” We think not.

First, Musnick has had his opportunity to make a record on this issue and he

did not. See Bess, 294 F.3d at 1309 (directing district court to grant motion to compel

since plaintiff failed to made a record as to costs).5
6There are other possible outcomes of a “loser pays”arbitration that would mirror those

under Title VII in district court. See Rajjak v. McFrank and Williams, 2001 WL 799766

(S.D.N.Y. 2001). 

7The Agreement provides that the arbitrator “shall” award costs and fees to the prevailing

party. Nevertheless, at least three circuits have held that the arbitrator may determine whether

contractual limitations on remedies are enforceable. Great Western Mortg. Corp. v. Peacock,

110 F.3d 222, 230-31 (3d Cir. 1997) (“Any argument that the provisions of the Arbitration

Agreement involve a waiver of substantive rights afforded by the . . . statute may be presented in

the arbitral forum”); accord Larry’s United Super, Inc. v. Werries, 253 F.3d 1083, 1085-86 (8th

Cir. 2001); MCI Telecommunications Corp. v. Matrix Communications Corp., 135 F.3d 27, 33 n.

12 (1st Cir. 1998). Once a dispute is determined to be validly arbitrable, all other issues are to be

decided at arbitration. Peacock, 110 F.3d at 230. See also Metro E. Center for Conditioning and

Health v. Qwest Communications Int’l, Inc., 294 F.3d 924, 929 (7th Cir. 2002).

11

 More importantly, however, there is no record that could be made at this point.

See Blair, 283 F.3d at 610 (remand appropriate where claimant required to pay onehalf of the arbitrator’s fees but not where agreement silent as to fees, rendering risk

that claimant will incur prohibitive costs too speculative). Whether Musnick will, in

fact, incur attorneys’ fees in this matter depends entirely on whether he prevails in

arbitration. If he does, he will incur no fees at all under the agreement’s “loser pays”

provision. In this event, obviously, he will not have been deprived of any statutory

right or remedy by the mandatory arbitration.6

Should he not prevail, he may incur liability for costs and fees.7

 If he believes

that liability is excessive or that it deprives him of his statutory remedy, he may seek

judicial review. Agreement at 12; see also First Options of Chicago, Inc. v. Kaplan,

514 U.S. 938 (1995) (arbitration awards may be vacated if they are in “manifest

disregard of the law”); Koveleskie, 167 F.3d at 366 (“[J]udicial review of arbitration
12

awards is sufficient to protect statutory rights”). At that point, the district court may

make an informed judgment on whether the Agreement deprived him of a statutory

remedy by conditioning the exercise of his statutory right on the payment of excessive

costs. See DeGaetano v. Smith Barney, Inc., 983 F. Supp. 459, 461 (S.D.N.Y. 1997)

(sending claim to arbitration, but subsequently vacating arbitrator’s denial of

attorney’s fees after DeGaetano provided specific evidence thatshe suffered too much

of a transaction cost by substituting an arbitral forum for court).

In the meantime, we decline to decide the validity of the attorney’s fees

provision. “A court compelling arbitration should decide only such issues as are

essential to defining the nature of the forum in which a dispute will be decided.”

Larry’s United Super, Inc. v. Werries, 253 F.3d 1083, 1085-86 (8th Cir. 2001)

(quoting Great Western Mortg. Corp. v. Peacock, 110 F.3d 222, 230-31 (3d Cir.

1997)(internal quotation marks omitted); Thompson, 300 F.3d at 91. If the arbitrator

awards attorney’s fees to King, Musnick may challenge this award in federal court.

Werries, 253 F.3d at 1086 (“Whether federal public policy prohibits an individual

from waiving certain statutory remedies is an issue that may be raised when

challenging an arbitrator’s award”). That issue is not before us now. In reaching a

similar result the Seventh Circuit said:
13

Arbitration is the correct initial forum for the [plaintiffs] to

air their objection to the [loser pays] attorney’s fees

provision in the arbitration agreement. If an arbitrator does

award attorney’s fees against the [plaintiffs] the district

court would then be in a position to hear their argument

that the challenged provision on attorney’s fees is

unenforceable because it deprives them of a statutory right.

Thompson, 300 F.3d at 92. We agree. Once the arbitrator has reached the issues of

costs and fees, those items will no longer be speculative, and any issue presented

thereby will be ripe for decision.

III.

Musnick has not met his burden to show that mandatory arbitration of his

claim would result in prohibitive costs to him. Accordingly, the decision of the

district court to deny King’s motion to compel arbitration is reversed and the case

is remanded with instructions to grant the motion and stay these proceedings.

REVERSED AND REMANDED